Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Private Bills [Lords] (Standing Orders not previously inquired into complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the ease of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into which are applicable thereto, have been complied with, namely:—

Middlesbrough Corporation Bill [Lords.]

Bill to be read a Second time.

Provisional Order Bills (Standing Orders applicable thereto complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, the Standing Orders, which are applicable thereto, have been complied with, namely:—

Ministry of Health Provisional Order (Street) Bill.

Bill to be read a Second time To-morrow.

Plympton St. Mary Rural District Council Bill,

As amended, considered.

Motion made, "That Standing Orders 240 and 262 be suspended, and that the Bill be now read the Third time."—[The Chairman of Ways and Means.]

King's Consent signified; Question put, and agreed to.

Bill accordingly read the Third time, and passed.

Cancer Hospital (Free) Bill [Lords,]

Dearne District Traction Bill [Lords,]

Read a Second time, and committed.

Essex County Council Bill [Lords,]

To be read a Second time To-morrow.

Torquay and Paignton Tramways (Abandonment) Bill [Lords,]

Read a Second time, and committed.

Oral Answers to Questions — COAL INDUSTRY.

QUOTAS AND MINIMUM PRICES.

Mr. ROBINSON: 1.
asked the Secretary for Mines whether he has now considered the communications from the Central Council of Coalowners with regard to the separate allocation of inland and export quotas and the co-ordination of minimum prices; and whether he is in a position to state what legislation will be proposed to the House for the amendment of Part I of the Coal Mines Act?

The SECRETARY for MINES (Mr. Ernest Brown): At the moment, I can add nothing to the reply I gave on 23rd May to a similar question by my hon. Friend, except that a meeting of a special Committee of the Central Council to consider further the form of representations to be made to me is being held to-morrow.

Mr. SMITHERS: May I ask whether the hon. Gentleman does not now realise that Part I of the Act, apart from—

Mr. SPEAKER: Mr. George Hall.

ROYALTIES AND WAYLEAVES.

Mr. GEORGE HALL: 3.
asked the Secretary for Mines if he will state the amount paid in royalties and wayleaves by the mining industry in South Wales and Monmouthshire during the years 1927, 1928, 1931, and 1932, and the amount paid by the industry for local rates over the same period?

Mr. E. BROWN: During the years ended January, 1928, 1929, 1932 and 1933, the estimated amounts paid by colliery owners in South Wales and Monmouthshire in royalties and wayleaves, including the rental value of freehold minerals where worked by the proprietors, were £1,602,000, £1,414,000, £1,279,000 and £1,141,000, respectively. The figures in respect of local rates for all purposes for the same periods were £783,000, £1,134,000, £246,000 and £210,000, respectively.

Mr. ERNEST EVANS: Will the hon. Gentleman's Department inquiry into the question of the large number of royalties and wayleaves, which are most extravagant in view of the present conditions prevailing?

Mr. BROWN: That is a matter for debate.

PRODUCTION (INTERNATIONAL COMPARISON).

Mr. G. HALL: 2.
asked the Secretary for Mines if he will state the production

Production of coal in the United Kingdom, Europe and the United states during the years 1913, and 1921 to 1932.


Country.
1913 (Postwar territory).
1921.
1922.
1923.
1924.
1925.
1926.
1927.
1928.
1929.
1930.
1931.
1932. (a)



Million Statute Tons.


United Kingdom (including Ireland).
287.4
163.3
249.7
276.1
267.2
243.3
126.4
251.3
237.6
258.0
244.0
219.5
208.8


Germany
138.5
134.0
127.9
61.3
116.9
130.5
143.0
151.1
148.4
160.8
140.4
116.8
103.1


France
43.2
27.8
30.6
37.1
43.3
46.3
50.6
51.0
50.5
52.9
53.0
49.2
45.5


Saar
13.0
9.4
11.1
9.0
13.8
12.8
13.5
13.4
12.9
13.4
13.0
11.2
10.3


Belgium
22.5
21.4
20.9
22.6
23.0
22.7
24.9
27.1
27.1
26.5
27.0
26.6
21.1


Netherlands
1.8
3.9
4.5
5.2
5.8
6.7
8.5
9.2
10.5
11.4
12.0
12.7
12.6


Poland
40.3
29.4
34.1
35.5
31.8
28.6
35.2
37.5
40.0
45.5
36.9
37.7
28.4


Soviet Union (Russia) (b).
28.0
8.5
8.6
14.3
13.8
14.7
23.1
29.4
31.7
38.8 (a)
44.4 (a)
51.9 (a)
56.3


Czechoslovakia
14.0
11.8
10.3
11.4
14.9
12.4
14.0
13.8
14.3
16.5
14.2
12.9
10.9


Spain
4.0
4.9
4.4
5.9
6.0
6.0
6.4
6.5
6.3
6.9
7.0
7.1
6.8


Rest of Europe
1.9
1.7
2.5
2.5
2.5
2.5
2.6
2.7
2.7
3.0
3.0
2.8
2.6


Total Continental Europe.
307.3
252.8
254.9
204.8
271.8
283.2
321.8
341.7
344.4
375.7
350.9
328.9
297.6


United States
508.9
452.0
425.7
587.4
510.4
519.5
587.3
533.8
514.4
543.6
479.5
394.5
317.0

(a) Provisional and subject to correction.

(b) Tears ended 30th September up to and including 1928. Figures include Asiatic Russia.

EMPLOYÉS, WAGES, AND OUTPUT.

Mr. G. HALL: 4.
asked the Secretary for Mines the total number of miners employed above and below ground, respectively, in 1913, 1919, and 1932; what was the total quantity of coal produced and its value at the mine mouth; and what was the average wage paid per miner employed, giving the particulars separately for each coalfield in each of the years 1913, 1919, and 1932?

Mr. E. BROWN: As the reply involves three statistical statements which are too long to print in the OFFICIAL REPORT, I

of coal for the United Kingdom, the Continent of Europe (distinguishing the principal producing countries) and the United States of America, for each of the last 12 years, and also 1913?

Mr. E. BROWN: As the answer involves a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

am sending copies of them to the hon. Member.

Mr. C. EDWARDS: Is not this a queer way of doing the business?

Mr. BROWN: It is following the recent practice of the House. These statistical tables are very long indeed, and it has not been the practice recently to print excessively long tables of figures. If any hon. Member is interested, I shall be very glad to send him a copy.

Mr. HALL: Can the hon. Gentleman put a copy in the Library?

Mr. BROWN: I will gladly do that.

CANNOCK CHASE COALFIELDS.

Mrs. WARD: 5.
asked the Secretary for Mines if he is now able to state what will be the position of the collieries in the Cannock Chase coalfield that will be left outside the proposed amalgamation scheme of the Coal Mines Re-organisation Commission?

Mr. E. BROWN: I presume that any collieries that are not amalgamated will remain as they are now, but if the hon. Lady would care to place before me any particular points about which she is concerned, I will be happy to bring them to the notice of the Commission.

Mrs. WARD: May I ask my hon. Friend how many mines will be left outside the scheme?

Mr. BROWN: If my hon. Friend will let me know whether she wants to know about mines or undertakings I shall be glad to try to find out.

Mrs. WARD: Mines, Sir.

Mrs. WARD: 7.
asked the Secretary for Mines if any agreement on wages has yet been reached in the Cannock Chase coalfield; and, if so, how far does the proposed amalgamation scheme of the Coal Mines Re-organisation Commission affect the agreement?

Mr. E. BROWN: I understand that there is at present no formal wage agreement in this district. The arrangement upon which they are working is a verbal one. With regard to the second part of the question, wages are entirely a matter for settlement between the two sides in the industry, and I am not able to appreciate that the proposals of the Reorganisation Commission have any bearing upon the question of a wages agreement.

Mrs. WARD: Is my hon. Friend aware that difficulties have been experienced in the district?

Mr. BROWN: I am not aware of any reason why there should be any difficulties, and, if the hon. Lady can inform me about them, I shall be glad to pass that information on to the Commission.

AMALGAMATION SCHEMES.

Mrs. WARD: 6.
asked the Secretary for Mines whether any advantages to the miners in wages and employment, to the coal industry in enhanced prosperity, and
to the public in cheaper fuel, are anticipated from the proposed amalgamation schemes of the Coal Mines Re-organisation Commission?

Mr. E. BROWN: I would remind the hon. Lady that under the provisions of the Coal Mines Act, 1930, under which the Coal Mines Reorganisation Commission was set up, the commission is required in the first instance to satisfy itself, in regard to a proposed amalgamation scheme, that it is expedient for the purposes of promoting the more economical and efficient working, treating or disposing of coal. Furthermore, under the provisions of the same Act, the Railway and Canal Commission cannot confirm such a scheme unless it is satisfied that it would be in the national interest to do so, and that it will result in lowering the cost of production or disposal of coal. With regard to wages and employment, I have at present no information at all that would enable me to express an opinion.

Captain PETER MACDONALD: Can the hon. Gentleman say in how many cases in which amalgamation has already been carried out these conditions have been fulfilled?

Mr. BROWN: If the hon. and gallant Member will put that question down, I will ask for that information from the Commission.

Lieut.-Colonel ACLAND-TROYTE: Is the hon. Gentleman aware that although he has told us a good deal about the provisions of the Coal Mines Act he has not answered the question on the Paper?

Mr. BROWN: My hon. and gallant Friend will understand that under this part of the Act I am not responsible and I can only give the information by courtesy of the Commission, which is an independent body.

HYDROCARBON FUEL OIL.

Mr. TOM SMITH (for Mr. CAPE): 8.
asked the Secretary for Mines what was the average price of heavy hydrocarbon fuel oil in this country during May and how such average price compares with that ruling during May, 1929?

Mr. E. BROWN: I am unable to give average prices, but the hon. Member will find typical figures in the answer which
I gave on 26th May to the hon. and gallant Member for Pontefract (Captain Sotheron-Estcourt). I am sending him a copy. Prices during May were 20s. 5d. per ton above the final figures quoted in the answer referred to.

Oral Answers to Questions — TRADE AND COMMERCE.

NEW FACTORIES.

Mr. ROBINSON: 13.
asked the President of the Board of Trade the number of new factories which have been set up by British companies as distinct from foreign companies since the imposition of tariffs, and the number of workers employed in such factories?

Dr. McLEAN: 21.
asked the President of the Board of Trade when he will give to the House the promised statement showing the development of industries throughout the country?

Lieut.-Colonel ACLAND - TROYTE: Would it not be advisable that the House should adjourn if Ministers are not here?

Mr. LANSBURY: Would it be in order to move that we should adjourn for a
couple of hours to allow Ministers to recover from these lunches? What are we to do? Why should we sit here?

Mr. SPEAKER: I think Ministers will be here before so long a time as that.

Mr. LANSBURY: Then could we adjourn for an hour? It would be better than killing time like this. We could have a smoke outside.

Later—

Lieut.-Colonel J. COLVILLE (Secretary, Overseas Trade Department): I owe the House an apology. It was arranged that I should answer the questions put down to the President of the Board of Trade, who is engaged at an important session of the World Economic Conference. I was held up on account of special traffic on my way here. I apologise for the length of the answer.
A recent survey made by the Board of Trade, in co-operation with the Factory Department of the Home Office and with the Ministry of Labour, has shown that the total number of new factories established in this country during the year 1932 and employing 25 or more people each, was 646. The survey has been
confined to factories engaged in the manufacture or the processing of goods for sale and does not cover factories engaged in the provision of services, such as laundries, dry-cleaning establishments, etc. These 646 factories were employing 44,750 people at the end of April, 1933. Included in this total were 122 factories set up by, or with the assistance of, foreign concerns and employing about 8,500 people at the end of April, 1933. In addition, there are recorded 166 cases of factory extensions during the year each providing for additional employment of 25 or more people. During the same period, 355 factories falling within the same description were closed down. A short statement showing the distribution of these undertakings will be circulated in the OFFICIAL REPORT. It is further proposed to publish at an early date in the Board of Trade Journal a more detailed statement showing the products of these new undertakings and certain other particulars, including the towns and areas in which they are situated.

Mr. LAWSON: Will the hon. and gallant Gentleman also say, in the statement which he circulates, how many pits have been closed down, and how many men have been thrown out of employment?

Mr. RHYS DAVIES: Will the hon. and gallant Gentleman be good enough to tell the House at some future date, or to-day if he can, how many such factories have been opened by foreigners in their own countries?

Mr. HERBERT WILLIAMS: As the answer includes Question No. 21, which my hon. Friend the Member for Tradeston (Dr. McLean) asked me to put on his behalf, may I ask my hon. and gallant Friend whether he is aware that Question No. 21 relates to the survey which the President of the Board of Trade undertook to carry out at the request of my hon. Friend the Member for Tradeston, and has nothing to do with the establishment of new factories as the result of the Import Duties Act?

Mr. MANDER: Will the hon. and gallant Gentleman also say, in his circulated statement, how many factories, as well as pits, have been closed down during the same period, and how many have
been added to the number of unemployed?

Region.
New Factories.
Employment.
Factory Extensions.
Factories closed down.


S. & S.W. England
…
…
62
4,100
17
24


London
…
…
251
16,600
17
50


Wales
…
…
11
650
8
4


The Midlands
…
…
96
8.100
32
71


Eastern Counties
…
…
44
2,300
31
17


Lancashire
…
…
115
9,300
19
106


Yorkshire
…
…
36
1,900
28
42


North East Coast
…
…
11
400
4
5


Scotland
…
…
20
1,400.
10
36


Total
…
…
646
44,750
166
355

IMPORT DUTIES (LACE).

Mr. CAPORN: 51.
asked the Chancellor of the Exchequer whether he has received any report of the Import Duties Advisory Committee with respect to an application for an increase in duties on lace made to the committee in March, 1932; and, if not, whether he can ascertain from the committee the reason of the delay in dealing with this application?

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): I would refer my hon. Friend to the answer which I gave on 22nd May to the hon. Member for Derby, South (Mr. Emrys-Evans) of which I am sending him a copy.

Mr. CAPORN: Can the hon. Gentleman give an answer to the latter part of the question?

Mr. HORE-BELISHA: That is a matter which does not come within the competence of the committee.

Mr. CAPORN: Cannot the hon. Gentleman obtain from the committee the reason for the delay in dealing with this application? It is over 15 months since it was first made.

TRADE AGREEMENTS AND NEGOTIATIONS.

Mr. REMER: 14.
asked the President of the Board of Trade if he has yet had any conversations or negotiations with France with regard to making a trade agreement between Great Britain and that country?

Lieut.-Colonel COLVILLE: The matter has been mentioned informally in con-

Mr. SPEAKER: That does not arise out of the question on the Paper.

Following is the statement:

versations, but no negotiations are in progress, nor have any arrangements been made for opening negotiations.

Mr. REMER: Will my hon. and gallant Friend give an assurance that the pledge given to the silk industry by the Chancellor of the Exchequer in his Budget speech will be strictly honoured?

Mr. LAWSON: 25.
asked the President of the Board of Trade whether it is proposed to give the House an opportunity of discussing the trade agreements with Denmark, Norway, Sweden and Argentina; and, if so, if he can state the date?

Lieut.-Colonel COLVILLE: The trade agreements with Denmark and Argentina were debated in this House on the 10th May last. As regards the agreements with Norway and Sweden, these were laid before the House on the 16th May last in accordance with the arrangements under which agreements of this nature are laid before the House prior to ratification. I have no doubt that, if there is a desire to debate these agreements, a request will be made through the usual channels.

Mr. LAWSON: Can the hon. and gallant Gentleman tell us when these agreements are to become operative?

Lieut.-Colonel COLVILLE: No, Sir, I cannot give an exact date; it depends on the Finance Bill which is now going through Parliament.

Mr. HANNON: Will my hon. and gallant Friend represent to the President of
the Board of Trade that there is a feeling in this House that these agreements should be debated?

Lieut.-Colonel COLVILLE: I have indicated in my answer that arrangements for such a Debate might be made through the usual channels.

Mr. LAWSON: Is the hon. and gallant Gentleman aware that there has been no result from the German Trade Agreement as far as the coal trade of this country is concerned, and that pits are lying idle or are being closed down?

Lieut.-Colonel COLVILLE: My hon. Friend is not in possession of the facts.

Lieut.-Colonel ACLAND-TROYTE: Do the "usual channels" mean that, if our side want a Debate, we cannot do anything?

CEYLON (COTTON IMPORTS).

Mr. FLEMING: 15.
asked the President of the Board of Trade the value of the exports of cotton goods from the United Kingdom to Ceylon for the three months prior to 1st September, 1931, and for the last three months for which statistics are available; and what was the total value of all cotton goods imported into Ceylon during the same period.

Lieut.-Colonel COLVILLE: The value of the aggregate imports of cotton goods, excluding apparel, into Ceylon during the three months ended August, 1931, and the three months ended April, 1933, amounted to £272,262 and £199,375, respectively, of which imports recorded as of United Kingdom origin were valued at £109,746 and £80,429, respectively.

CZECHOSLOVAKIA (FOOTWEAR).

Mr. CROSS: 17.
asked the President of the Board of Trade the number of pairs of footwear imported from Czechoslovakia during the three years preceding the imposition of tariffs, and subsequent imports to the latest convenient date?

Lieut.-Colonel COLVILLE: The total number of boots and shoes of all kinds imported into this country during the years 1929, 1930 and 1931 and registered as consigned from Czechoslovakia was 93,000, 142,000 and 301,000 dozen pairs, respectively. The number so imported during the 12 months ended May, 1933, was 94,000 dozen pairs.

SURPLUS PRODUCTION.

Mr. CROSS: 18.
asked the President of the Board of Trade whether it is the policy of His Majesty's Government to limit the erection of surplus manufacturing plant by foreign interests in this country?

Lieut. - Colonel COLVILLE: The Government have no power to prevent the installation of manufacturing plant in this country, whether by foreign or by British interests.

Captain CR00KSHANK: Do the Government do anything by way of directing that such factories shall be started in the more derelict areas, instead of in the more prosperous areas around London?

Mr. H. WILLIAMS: Will my hon. and gallant Friend give attention to the Bill introduced by my hon. Friend the Member for South-West St. Pancras (Mr. Mitcheson), which would give those powers?

Lieut.-Colonel COLVILLE: I could not give that undertaking.

RUSSIAN GOODS (IMPORT PROHIBITION).

Sir WILLIAM DAVISON: 20.
asked the President of the Board of Trade under what circumstances Russian Oil Products, Limited, are still obtaining-petroleum for distribution throughout. Great Britain?

Lieut.-Colonel COLVILLE: No licences for the importation of Russian petroleum oils have been issued by the Board of Trade under Section 2 of the Russian. Goods (Import Prohibition) Act, 1933. It may be that Russian Oil Products,. Limited, are importing supplies from non-Russian sources.

Sir W. DAVISON: Is my hon. and gallant Friend aware that R.O.P. petrol, under the description "Renowned of Petrols," is still being sold all through the country in large quantities; and does he think that that is satisfactory, in view of the prohibition of the import of Russian materials?

Lieut.-Colonel COLVILLE: I can only say that it cannot be imported from Russia, because since the date of the embargo no licences have been issued.

Captain P. MACDONALD: Is my hon. and gallant Friend aware that the
Russian Government are using other countries, such as Persia, as a means of exporting their products to this country?

Mr. E. EVANS: Does not this show that the embargo is a complete farce?

Lieut.-Colonel COLVILLE: No, Sir.

Sir BASIL PETO: 30.
asked the President of the Board of Trade what quantity of petroleum oils have been imported into this country from Russia since the Royal Proclamation of 19th April last, prohibiting the import of petroleum oils from Russia; and whether such oil has been imported under licence given under Section 2 of the Russian Goods (Import Prohibition) Act; and, if so, how many licences and for what quantities have been granted since 19th April last?

Lieut.-Colonel COLVILLE: The prohibition to which my hon. Friend refers took effect on 26th April, and as from that date Russian petroleum oils could not be imported except under licence. No such licences have been issued.

Sir B. PETO: Is my hon. and gallant Friend satisfied that, although no Russian oil can be imported except under licence, as a matter of fact no Russian oils have been imported, and, if so, can he tell us from what source the Russian oil products organisations throughout the country are still selling the full volume that they sold before exactly as if no embargo had been imposed?

Lieut.-Colonel COLVILLE: I can only tell my hon. Friend that it must be from a non-Russian source.

Sir B. PETO: I beg to give notice that I shall raise this question on the Adjournment to-morrow.

DANISH BUTTER (IMPORTS).

Captain P. MACDONALD: 22.
asked the President of the Board of Trade the amount of Danish butter imported into this country during each of the past six weeks?

Lieut.-Colonel COLVILLE: I regret that the information is not available, as statistics of imports into the United Kingdom are not compiled in respect of periods of less than a calendar month.

Mr. T. WILLIAMS: Has the hon. and gallant Gentleman any reason to believe
that the quantities are in excess of the amount provided for in the trade agreement?

Lieut.-Colonel COLVILLE: No, Sir. In point of fact, the quantity mentioned in the trade agreement has not yet begun to operate, but in the month of May the quantity imported was considerably less than in May of last year.

ARMS (EXPORT LICENCES).

Mr. MANDER: 23.
asked the President of the Board of Trade in respect of the last three months, what licences for the export of arms have been granted in respect of China, Japan, Peru, Chile, Bolivia, and Paraguay?

Lieut.-Colonel COLVILLE: I regret that it has not been possible to complete a statement giving the information desired in the time available, but I will circulate it as soon as possible in the OFFICIAL REPORT.

CANADA.

Mr. GRAHAM WHITE: 24.
asked the President of the Board of Trade the total exports to and imports from Canada for the first quarter of 1931, 1932, and 1933?

Lieut.-Colonel COLVILLE: The information desired is set out on pages 201, 204 and 207 of the issue for April last of the "Accounts relating to Trade and Navigation of the United Kingdom."

Mr. WHITE: 11.
asked the Secretary of State for Dominion Affairs if he has any information in regard to the delay in the hearing of the application of the woollen industry to the Canadian Tariff Board?

The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Malcolm MacDonald): I am informed that the Canadian Tariff Board is proceeding as rapidly as possible with the steps which are a necessary preliminary to the hearing.

Mr. MALLALIEU: 12.
asked the Secretary of State for Dominion Affairs if he is aware that British bituminous coal sold in Canada has been brought under the Canadian anti-dumping law; what reasons have been given for this action; and whether he proposes to make representations to His Majesty's Government in Canada?

Mr. MacDONALD: I am aware that imports of United Kingdom bituminous coal into Canada are subject to dumping duty and I understand that such duty is being applied in cases where the export price is stated to be below the fair market value as sold for home consumption. As was said in answer to the hon. Member for Birkenhead East (Mr. White) on 13th June, the matter is under consideration, but I am not yet in a position to make a statement.

Mr. MALLALIEU: Is not the Secretary of State aware that Nova Scotian coals, for the benefit of which these duties have been imposed, are themselves highly subsidised by the Canadian Government?

Mr. MacDONALD: My right hon. Friend is aware of all the facts.

The following table shows the total tonnage of bran, pollard, sharps and middliugs imported into and exported from the United Kingdom in the trade with the Irish Free State during the periods specified:


Period.
Imports into the United Kingdom consigned from the Irish Free State.
Exports from the United Kingdom consigned to the Irish Free State.






Domestic Exports.
Re-exports.


Year:


Tons.
Tons.
Tons.


1931
…
…
837
25,123
3,526


1932
…
…
5,668
15,998
4,213


January to May:





1931
…
…
514
10,603
973


1932
…
…
189
12,248
3,873


1933
…
…
7,204
—
—

Mr. HARTLAND (for Mr. RUTHERFORD): 10.
asked the Secretary of State for Dominion Affairs whether, in view of the attitude of the Irish Free State to the Empire, and the consequent results to trade relations between the Free State and the United Kingdom, he will take steps to remove the representative of the Irish Free State from the Empire Marketing Board?

Mr. MacDONALD: No, Sir.

MULTIPLE SHOPS.

Mr. HALES: 28.
asked the President of the Board of Trade whether, having regard to the unfairness and injury to

Mr. MALLALIEU: Will he use the big stick on Mr. Bennett now that he has got him over here?

IRISH FREE STATE.

Mr. DAVID REID: 27.
asked the President of the Board of Trade the amount of corn offals, viz., bran, pollard, sharps, and middlings, exported from the United Kingdom into the Irish Free State for the first five months of the years 1931, 1932 and 1933, respectively, and the amount of the like offals exported from the Irish Free State into the United Kingdom during the like periods; and the total trade in such offals between the United Kingdom and the Irish Free State during each of the years 1931 and 1932?

Lieut.-Colonel COLVILLE: As the answer involves a number of figures, I will circulate it in the OFFICIAL REPORT.

Following is the answer:

the trade of the retail trader through the competition from multiple shops and chain stores, he will consider appointing a commission to go into the whole question, and in the meantime take steps to prohibit any further stores being opened, which course has already been taken in Germany?

Lieut.-Colonel COLVILLE: My right hon. Friend sees no reason to intervene in this matter.

Mr. HALES: Is not my hon. and gallant Friend aware that, in addition to the very great injury, which is becoming more serious every day, the manufacturers who are supplying these stores, and many of
whom are giving their whole output to these stores, are being forced to accept renewals of contracts at lower prices, which is driving some of them into insolvency?

JAPANESE COMPETITION.

Captain P. MACDONALD: 29.
asked the President of the Board of Trade whether any progress has been made in the conversations with the Japanese Government regarding Japanese competition in British Colonial markets?

Lieut.-Colonel COLVILLE: I would refer my hon. and gallant Friend to the answer I gave to the hon. Members for Stockport (Mr. Hammersley and Captain Dower) on the 15th June, to which I have as yet nothing to add.

Mr. H. WILLIAMS (for Mr. MITCHESON): 26.
asked the President of the Board of Trade if he will arrange to publish a White Paper showing the increase of Japanese competition in the United Kingdom and in the markets of the Empire overseas?

Lieut.-Colonel COLVILLE: I do not think that the labour and expense involved in preparing a White Paper on the lines suggested would be justified. The Monthly Trading Accounts give up-to-date information regarding the United Kingdom market, and such information as is obtainable regarding other markets is available from published sources.

Mr. WILLIAMS: In view of the fact that a great many of our monthly trade entries do not discriminate the countries from which the goods come, for example in the case of rubber shoes from Czechoslovakia, would it not be desirable to have the information supplied in view of the anxiety that prevails.

Lieut.-Colonel COLVILLE: I will look into the question further but, as at present advised, it appears inadvisable to publish a special Paper as most of the information is at present available.

SUEZ CANAL COMPANY.

Sir SAMUEL R0SBOTHAM (for Mr. POTTER): 40.
asked the Secretary to the Overseas Trade Department if he will state the ratio of purchases of British materials bought during the last 10 years for use by the Suez Canal Company as compared with the ratio paid by British
shipping of the total canal dues; whether a report for 1932 on this matter has been furnished by the official Government directors; and, if so, will he place a copy of the report in the Library or otherwise will he ask to be furnished with a report on this point?

Lieut.-Colonel COLVILLE: I am in communication with the resident British director to ascertain how far the desired particulars may be available.

Oral Answers to Questions — SCOTLAND.

BLIND PERSONS' PENSIONS.

Mr. BURNETT: 34.
asked the Secretary of State for Scotland the number of cases of blind persons' pension claims in 1932 in which the pension officer has appealed to the Scottish Department of Health against the decisions of the local pensions committees; and the number of with drawals resulting?

The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins): In 1932 the number of appeals by pension officers to the Department of Health for Scotland against the decisions of local committees continuing blind pensions was 39. The Department disallowed the pensions in all these cases. As regards new claims the number of appeals received from pension officers in 1932 against the decisions of local pension committees to allow pensions was 59. In 30 of these cases the Department allowed a pension; in 26, pensions were disallowed; and three cases are still under consideration.

Mr. BURNETT: 35.
asked the Secretary of State for Scotland whether, in all cases of blind persons' pension appeals in Scotland, an additional examination by surgeons other than the original medical board is arranged for?

Sir G. COLLINS: In all cases which come before the Department of Health on appeal where examination has been made at a blind clinic, the Department are furnished with detailed reports by the examining surgeons. These specialists are fully conversant with the standards adopted for the purposes of the Blind Persons Act, 1920, and their reports form the basis of the Department's decisions. If, in any case of special difficulty, further examination were thought desirable, arrangements would be made to have this done.

Mr. BURNETT: Is it not the case that the Departmental Committee of 191V recommended that there should be an appeal to an assessor in any case where the justice of the certificate was questioned?

Sir G. COLLINS: I am not aware of that fact, but I will make inquiries.

BULLS AND RAMS (GOVERNMENT PURCHASES).

Mr. LEONARD: 36.
asked the Secretary of State for Scotland the total amount paid by the Board of Agriculture during the yearn 1928 to 1932 to sellers of bulls and rams by private bargain; the names of the six sellers from whom the largest supplies of bulls and rams were privately bought; and what total sum was paid to each of these six sellers during the years mentioned?

Sir G. COLLINS: As the answer contains a number of figures, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.

Following is the answer:

The total amount paid during the years 1928 to 1932 to sellers of bulls and rams by private bargain was for bulls £6,412 3s., and for rams £13,033 7s. 6d. The number of bulls bought was 130, and of rams 1,000. The largest supplies of bulls were obtained from Messrs. D. M. Macrae, C. G. Robertson, W. I. L. MacEwen, James Grant, J. MacDonald and A. M. McIntyre, and the total sums paid to each were respectively £1,260, £1,026, £846, £771, £555 and £430. The largest supplies of rams were obtained from Messrs. W. I. L. MacEwen, D. M. Macrae, W. and C. Mundell, J. Elliot, representatives of P. B. MacIntyre, and Mr. J. Macfarlane. The total sums paid to each were respectively £1,890, £1,608 10s., £1,508 10s., £1,495 7s. 6d., £1,340 and £1,117 10s. As indicated in my reply to the hon. Member of 2nd May, the Department anticipate that in future they will be able to have recourse to public sales to a greater extent than in the past.

SCHOOL ATTENDANCE (UDALE FARM).

Mr. LEONARD: 37.
asked the Secretary of State for Scotland whether he is aware that the children of school age resident on Udale Farm, who were attending Newhall School until the school
was closed for the summer (holidays in 1932, were refused admission to Newhall School when the school was opened after the holidays, and were informed that they would have to attend Peddieston School instead; that all the parents on the farm refused to send their children to Peddieston School, on the ground that there was no road to the school; that after the month of November four boys were admitted to Newhall School, while six girls and three boys were refused admission to Newhall School and have not attended any other school during the whole of the school year, and that no steps have been taken by the local authority to enforce attendance; and whether he proposes to take any steps to secure that the education authority for the county of Ross and Cromarty carries out its duty to secure the attendance of children at school?

Sir G. COLLINS: The facts are substantially as stated, but I am informed that it is not the case that there is no road from Udale Farm to Peddieston School. With regard to the last part of the question, I am informed that all the children at Udale Farm are now attending school, and there is, therefore, no occasion for the action suggested.

AGRICULTURAL SECURITIES CORPORATION.

Sir MURDOCH McKENZIE WOOD: 38.
asked the Secretary of State for Scotland what is the present position of the Scottish Agricultural Securities Corporation?

Sir G. COLLINS: I am informed that the corporation is still engaged in making necessary arrangements preliminary to the commencement of business, but it is hoped that they will be in a position to invite applications for loans before the autumn.

WATER SUPPLIES (RURAL AREAS).

Sir M. WOOD: 39.
asked the Secretary of State for Scotland whether his attention has been drawn to the difficulties encountered in providing adequate water supplies in rural districts; whether he is aware that by the derating of agricultural and other subjects consequent on the passing of the Local Government (Scotland) Act, 1929, the rateable value of many rural districts has been so diminished as to be incapable of supporting the cost of appropriate water schemes; and whether he will consider the advisability of trying to meet the difficulty by providing, by legislation or
otherwise, for the promotion of regional water schemes over large areas?

Sir G. COLLINS: The answer to the first part of the question is in the affirmative. As regards the remaining parts, the provision of water facilities in rural areas owing to the high cost involved has always been a matter of difficulty, and in order to cope with this problem provision was made in Section 33 of the Local Government (Scotland) Act, 1929, enabling a county council to give financial assistance towards the cost of water supplies in special districts which could not reasonably be expected to bear the burden unaided. In view of representations made to me on the subject, I am having the whole matter examined.

Sir M. WOOD: Has my right hon. Friend's attention been drawn to the increased difficulties which have been caused in regard to this matter by the De-rating Act?

Sir G. COLLINS: My attention has been called to that specific point during the last fortnight, and that is why a week ago I started having inquiries made on the subject.

Lieut.-Colonel ACLAND-TROYTE: Is it the view of the Liberal party that rates should be reimposed on agricultural land?

SOUTH DOWNS (MOTOR RACING).

Mr. MANDER: 41.
asked the Minister of Agriculture the circumstances under which the Commissioners of Crown Lands were first of all prepared to agree to a scheme for a hill-climbing motor race track on the steep northern slope of the South Downs, and subsequently withdrew their consent in view of the public interest aroused?

Captain Sir GEORGE BOWYER: I have been asked to reply. I think my hon. Friend is under a misapprehension. The Commissioners never gave their consent to the scheme referred to, and consequently no question of withdrawal of consent arises. The project having been submitted to the Commissioners it was their duty to give full consideration to the proposals of the promoters. The Commissioners, after investigation of the scheme, decided that it was not one which they should approve.

Mr. MANDER: Is it not a fact that until public attention was called to the matter the Commissioners were favourable to the project, and that it was only when it came to be discussed that they took alarm?

Sir G. BOWYER: No, Sir. I do not think that the hon. Member can say that.

RIVER DON (REPAIRS).

Mr. T. WILLIAMS: 42.
asked the Minister of Agriculture whether the scheme submitted by the Ouse Catchment Board for carrying out extensive repairs to the River Don has been approved; and what grant, if any, will be made by the Exchequer towards the cost?

Sir G. BOWYER: No such scheme has yet been submitted to the Ministry by the catchment board, but I understand that one is now in course of preparation.

BATA SHOE AND SLIPPER WORKS.

Lieut.-Colonel Sir MERVYN MANNINGHAM-BULLER: 43.
asked the Minister of Labour whether he can state his decision to the application for admission to this country of a number of Czechslovak technicians who would be employed at the new Bata shoe and slipper works at Tilbury; whether he is aware that labour for these works is likely to consist mainly of juveniles and persons under 25 years of age recruited from agricultural districts; and whether he can make any statement on this subject?

The MINISTER of LABOUR (Sir Henry Betterton): This application is at present under consideration, together with representations which have been made to me on the subject by the Joint Industrial Council for the boot and shoe industry. I can assure my hon. Friend that I will take all the circumstances as fully as possible into account before reaching a decision, but I should perhaps point out that my responsibility is limited to the issue or withholding of permits for a small number of foreign experts for a limited period to train British workers. I understand that local workpeople are likely to be engaged for employment at the factory, but I have no information as to the proportion of juvenile labour.

Sir ARTHUR MICHAEL SAMUEL: What is it that a foreign shoemaker can do that a British shoemaker cannot do?

Sir H. BETTERTON: I expect that the hon. Gentleman can tell me that better than I can tell him.

Sir A. M. SAMUEL: I do not think that they can teach us anything.

Mr. T. WILLIAMS: Before granting the permit, will the right hon. Gentleman assure himself that the firm referred to are not the same as that which refused to acknowledge trade unionism.

Sir H. BETTERTON: I am taking every fact into consideration before deciding whether these permits are to be granted or not, but I have pointed out in my answer how limited my power is; it is limited to granting or withholding a permit.

Mr. CROSS: 19.
asked the President of the Board of Trade what steps have been taken to ascertain whether the new Bata shoe and slipper works at Dagenham are or are not surplus to this country's present productive requirements?

Lieut.-Colonel COLVILLE: This matter has been discussed with a deputation from the Joint Industrial Council for the boot and shoe manufacturing industry which was recently received at the Ministry of Labour by the Parliamentary Secretaries of the Ministry of Labour and the Board of Trade.

HOTELS AND RESTAURANTS BILL.

Captain P. MACDONALD: 45.
asked the Prime Minister whether facilities are to be given during the. coming Session to the Hotels and Restaurants Bill?

The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): I am not in a position to make any statement on this subject.

GERMAN LOANS.

Sir NICHOLAS GRATTAN-DOYLE: 47.
asked the Chancellor of the Exchequer whether, in view of the Treasury alone having received all the proceeds of the London portion of the defaulted 5½ per cent. German loan issued as part of the international Young plan of appeasement and subscribed by British
private investors, he will recall to the Treasury the 5½ per cent. German bonds and issue British sterling 3½ per cent. securities in exchange?

Mr. POTTER: 46.
asked the Chancellor of the Exchequer whether, as the Treasury received all the sterling proceeds of the German Five and-a-half per cent. Young loan issued in London, he will arrange for the Treasury to cash the interest coupons in sterling for British holders who have been in possession of the London issue of the bonds for the past 12 months and collect the mark moratorium payments on those bonds until Germany resumes payment of interest in sterling in accordance with the contractual terms of the loan at the time of issue?

Mr. HORE-BELISHA: My right hon. Friend could not adopt these suggestions.

Colonel WEDGWOOD: 54.
asked the Financial Secretary to the Treasury whether he is in a position to supply a list of the German bonds on which the interest is in default or on which the German Government indicate that they propose not to pay interest; and, in particular, whether German municipal and provincial bonds, both in sterling and in dollars, are affected?

Mr. HORE-BELISHA: The German Transfer Moratorium does not come into force until 1st July and I understand that the effect on the service of particular German loans has not yet been decided, apart from the recognition of the special position of the Dawes and Young loans which was referred to in the communiqué issued on Saturday last.

Colonel WEDGWOOD: Surely some of the German municipalities have already defaulted. Is it not possible for His Majesty's Treasury to let investors in this country know which municipalities in Germany have defaulted?

Mr. HORE-BELISHA: I imagine that the answer which I gave was accurate, or I would not have given it.

Colonel WEDGWOOD: Take Heidelberg for instance; has it not defaulted?

REPARATIONS AND WAR DEBTS.

Mr. LAMBERT: 49.
asked the Chancellor of the Exchequer whether, having paid a further instalment of the American
Debt, the Government propose to ask for payments of foreign debts due to Great Britain?

Mr. HORE-BELISHA: The position remains as stated in the reply which my right hon. Friend gave to my right hon. Friend the Member for Epping (Mr. Churchill) on 13th December last, namely, that the suspension of Reparations and War Debts, agreed to at the Lausanne Conference, remains in force, but all the rights of His Majesty's Government under the existing agreements are integrally reserved.

Mr. LAMBERT: Do the Government propose to exercise the right to demand payment while we go on paying?

Mr. HORE-BELISHA: That is the question on the Paper. I have answered it.

Mr. LAMBERT: Do the Government propose to exercise the rights which they say are in abeyance?

Mr. HORE-BELISHA: They remain in abeyance until they are exercised.

Lieut.-Colonel ACLAND - TROYTE: Why should we not enforce payment from other countries when we ourselves are paying?

Mr. LAMBERT: 50.
asked the Chancellor of the Exchequer if it is proposed to issue a Supplementary Estimate to provide for the paid instalment of the American Debt, having regard to the fact that there is no provision for such payment in the Budget?

Mr. HORE-BELISHA: No, Sir. Payment will be made from within the Fixed Debt Charge.

Mr. LAMBERT: May I ask why, seeing that the American Congress have the final word, the House of Commons will not have an opportunity to discuss the matter?

Mr. HORE-BELISHA: The question on the Paper is the one to which I have given an answer. My hon. Friend asked whether there would be a Supplementary Estimate.

Mr. LAMBERT: And a discussion.

EXCHANGE RATES.

Colonel WEDGWOOD: 52.
asked the Chancellor of the Exchequer whether he can give the House any information as to the policy of the Government with regard to the question of tieing the dollar to the £; and, if so, at what figure it is proposed to do so?

Mr. HORE-BELISHA: My right hon. Friend cannot usefully make any statement on this subject at the moment.

Colonel WEDGWOOD: May I ask whether the hon. Gentleman and his right hon. Friend are fully alive to the desirability of following any inflation of the dollar by inflation of the £, so that the £ should not rise relatively to the dollar?

Mr. HORE-BELISHA: I am much obliged to the right hon. and gallant Gentleman for having expressed an opinion which I will convey to my right hon. Friend.

Colonel WEDGWOOD: It is not only my opinion which matters, but the opinions of the Chancellor of the Exchequer and of the hon. Gentleman himself, in view of the serious rise in the value of sterling which has taken place recently.

Mr. HORE-BELISHA: The right hon. and gallant Gentleman is trying to draw a statement from me as to the views of my right right hon. Friend and myself. I can assure him that we are "two hearts that beat as one."

Colonel WEDGWOOD: Which way do you beat?

Mr. BOOTHBY: Can the hon. Gentleman give an undertaking on behalf of His Majesty's Government that they will not attempt to tie the £ sterling to the dollar without a previous discussion in this House?

BEER DUTY.

Mr. LAMBERT: 53.
asked the Chancellor of the Exchequer whether he has had any further communications with the Brewers' Society in regard to the basis on which the reduction of the Beer Duty was effected; and whether he can now say, for the information of growers of English barley, what steps will be taken
to fulfil the assurances given as regards increased utilisation of home-grown malting barley?

Mr. HORE-BELISHA: The Brewers Society have stated that members of the society have unanimously confirmed the promise made by their representatives in connection with this year's Budget, and that the society are taking, and will continue to take, every possible means of securing the loyal adherence to the agreement. In the circumstances my right hon. Friend proposes to wait until there has been time to appreciate the results of their assurance.

Oral Answers to Questions — BRITISH ARMY.

DISCHARGE CERTIFICATES.

Brigadier-General NATION: 31.
asked the Financial Secretary to the War Office whether soldiers discharged from the service as being physically unfit for any form of military service have the nature of their disability endorsed on their discharge certificates?

The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): No, Sir; but, if a soldier is considered fit for employment in civil life, an entry to this effect is included in the certificate.

OFFICERS (FITNESS FOR ACTIVE SERVICE).

Colonel CRUDDAS: 32.
asked the Financial Secretary to the War Office how many regimental officers who have not qualified for staff or other specialist employment, who are now over age to do so and who are not passed fit for active service, are at present serving with the cavalry, Royal Artillery, and infantry, respectively?

Mr. COOPER: All regimental officers of the Regular Army who are serving have been passed fit for general service except those who are on temporary sick leave.

Colonel CRUDDAS: 33.
asked the Financial Secretary to the War Office whether there is an annual medical inspection for general officers on the active list; and, if so, how many have been reported to be unfit for active service daring the last two years?

Mr. COOPER: All general officers on whom annual confidential reports are
rendered are medically examined for the purpose of those reports. As regards the second part of the question, the answer is none.

RATES AND TAXES.

Mr. H. WILLIAMS (for Mr. MITCHESON): 48.
asked the Chancellor of the Exchequer if he can furnish an approximate estimate of the percentage of the national income taken in rates and taxes in 1913 and at the present time, respectively?

Mr. HORE-BELISHA: The sums collected in rates and taxes amounted to about £245,000,000 in 1913 and amount to about £816,000,000 at the present time. I regret that there are no official estimates available of the national income.

Mr. WILLIAMS: Would my hon. Friend be willing to give some endorsement to the estimates published from unofficial sources, as many of his predecessors have done?

Mr. HORE-BELISHA: I can inform my hon. Friend that it was 11.6 per cent. of the national income for 1911, according to the estimate of Professor Bowley, and 24.1 per cent. of the national income for 1932, according to the estimate of Mr. Colin Clark, but I cannot, of course, vouch for the figures.

FIJI (CURRENCY).

Captain CUNNINGHAM-REID: 55.
asked the Secretary of State for the Colonies if he has received any representations from the Governor of Fiji regarding the provision of currency of smaller denominations than that at present circulating in Fiji and the Western Pacific, and what he has decided?

Sir G. BOWYER: The Governor of Fiji has recommended the introduction of nickel pence and halfpence in Fiji in place of copper coins. The proposal is now under detailed examination. In the British Solomon Islands Protectorate the shilling is the coin of smallest denomination in ordinary use. My right hon. Friend understands that the question of introducing coins of lower value has been the subject of some discussion, but he has received no specific recommendations
from the High Commissioner on the subject.

Captain CUNNINGHAM-REID: Will this coinage be made at the Royal Mint?

Sir G. BOWYER: I could not say without notice.

NEW MEMBER SWORN.

Sir Edward William Macleay Grigg, K.C.M.G., K.C.V.O., D.S.O., M.C., for the County of Chester (Altrincham Division).

JURIES (AMENDMENT).

Mr. HOLFORD KNIGHT: I beg to move:
That leave be given to bring in a Bill to amend the law relating to jurors and juries in England and Wales.
The main purpose of this Bill, as recited in the Preamble, is directed to a situation in which certain qualifications and limitations of the duty of service as jurors result in the burden of such duty falling on too limited a number of His Majesty's lieges. It means, in effect, that the present definitions of jury service make an undue call upon the services of men, and that has resulted from the view taken of the Sex Disqualification (Removal) Act, 1919, which opened jury service to women. That Statute was regarded as an experiment, and the definition of juror used in connection with that Statute did not go back to the original definitions, with the result that a very large number of wives are not on the jury list. The principal provision of the proposed Bill is to redefine the word "juror" to include every person, and the wife or husband of such person within the Statutes. There are cases of husbands escaping jury service under cover of their wives, and such cases are also to be brought within the ambit of the Bill. A further addition to the qualification of a juror is added by the words:
or the wife or husband of such householder or occupier of a shop, warehouse, counting house, chamber, or office for the purpose of trade or commerce within the said City (of London), and have lands, tenements or personal estate of the value of £100.
This relates to the qualification of special juror in the City of London. That par-
ticular provision is directed to the purpose of extending the burden of jury service more evenly over the sexes. I impress the view upon the House that now that women enjoy the privilege of the franchise they should be ready, as I believe they are, to undertake the duties of citizens in connection with jury service. The main purpose of the Bill is to extend that service on those lines. While this is the principal purpose to be obtained, opportunity is taken under the Bill of reviewing certain other matters connected with jury service which have been observed during the service of women on juries since the year 1920, when it began. By reason of the view taken that it was an experiment, a device was used in some cases of challenging women jurors submitted for service, for the purpose of excluding women altogether from the particular jury and from the trial. It is thought by large bodies of women to be a hindrance which they should no longer be called upon to meet, and therefore in the Bill it is proposed to lay down that no challenge shall be made on the ground of sex, and in the case of any challenge the juror challenged shall be replaced by a member of the same sex. I am aware that that may give rise to some controversy, but it is a matter which can be examined later.
It is not intended to interfere with the ancient right of a subject to select his or her jurors, but to deal with what some of us believe to be an evasion of the Statute which we think should be prevented. A further matter to be dealt with in the Bill is the limitation placed upon the service of women upon juries by the Sex Disqualification (Removal) Act. A discretion was given to the judge to make an order that the jury be composed of men only or of women only "by reason of the nature of the case." It was inserted because it was thought that certain cases should not be opened in the presence of women, but I am bound to say from considerable experience of such matters that that is a restriction which need no longer be insisted upon, and therefore the proposed Bill takes the opportunity of repealing that limitation.
The Bill reviews the Rules of Court set up by the Sex Disqualification (Removal) Act in a particular way. One of the Rules of Court under that Statute exempts from attendance as jurors
any women who are for medical reasons unfit to attend.
Those words, and the way in which they have been applied, are regarded by many responsible women as unnecessary. It is proposed to substitute these words:
Exempting from attendance as jurors any person to whom special hardship would be caused on account of physical unfitness or business or household considerations.
The House will see that the objection —and a very proper objection—made to the present words of the Statute is cured and that at the same time opportunity is taken to enable the court to review cases of hardship in jury service not only in the case of women, but in the case of men. Such are the provisions of the Bill. I am happy to tell the House that in the main the Bill is non-controversial. The only controversial matter may be connected with the right to challenge. The Bill is supported in all quarters of the House. It has been drafted by a very highly respected Member of the House, and is brought forward by me at the request of the National Council of Women, a well-known organisation representing women of all classes in the country. In these circumstances I ask the House to give me leave to proceed with the Bill.

Question put, and agreed to.

Bill ordered to be brought in by Mr. Holford Knight, Mr. Denman, Mr. Isaac Foot, Sir Ernest Graham Little, Major Hills, Mr. Mander, Miss Pickford, Miss Rathbone and Sir John Withers.

JURIES (AMENDMENT) BILL,

"to amend the law relating to jurors and juries in England and Wales," presented accordingly, and read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 120.]

BILLS REPORTED.

METROPOLITAN POLICE BILL.

Reported, with Amendments, from Standing Committee C.

Report to lie upon the Table, and to be printed.

Minutes of Proceedings to be printed.

Bill, as amended (in the Standing Committee), to be considered upon Monday next, and to be printed. [Bill 119.]

LONDON COUNTY COUNCIL (MONEY) BILL.

Reported, with Amendments; Report to lie upon the Table, and to be printed.

MANCHESTER CORPORATION BILL (changed to "MANCHESTER ROYAL INFIRMARY BILL").

Reported, with Amendments [Title amended]; Report to lie upon the Table, and to be printed.

CHAIRMEN'S PANEL.

Mr. William Nicholson reported from the Chairmen's Panel; That they had appointed Mr. Entwistle to act as Chairman of Standing Committee C (in respect of the Education (Necessity of Schools) Bill [Lords]).

Report to lie upon the Table.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE C.

Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Members from Standing Committee C: Mr. Hicks, Captain Arthur Hope, and Captain Waterhouse; and had appointed in substitution: Colonel Sir George Courthope, Mr. Cove, and Lieut.-Colonel Ruggles-Brise.

Mr. William Nicholson further reported from the Committee; That they had added the following Ten Members to Standing Committee C (in respect of the Education (Necessity of Schools) Bill [Lords]): Lieut.-Commander Agnew, Duchess of Atholl, Mr. Michael Beaumont, Sir John Birchall, Earl Castle Stewart, Countess of Iveagh, Mr. Haydn Jones, Mr. Morgan Jones, Mr. Raikes, and Mr. Ramsbotham.

Reports to lie upon the Table.

MESSAGE FROM THE LORDS.

That they have agreed to,—

Victoria Infirmary of Glasgow Act, 18S8 (Amendment), Order Confirmation Bill, without Amendment.

London County Council (General Powers) Bill, with Amendments.

That they have passed a Bill, intituled, "An Act to confirm a Provisional Order
under the Private Legislation Procedure (Scotland) Act, 1899, relating to the Aberdeen Royal Infirmary and Mental Hospital." [Aberdeen Royal Infirmary and Mental Hospital Order Confirmation Bill [Lords.]

And also, a Bill, intituled, "An Act to repeal certain statutory restrictions upon the use of part of the Adelphi Estate; to authorise the widening of certain existing streets and the construction of new streets and the stopping up of an existing street on that Estate; and for other purposes."[Adelphi Estate Bill [Lords].

Orders of the Day — FINANCE BILL.

As amended, further considered.

CLAUSE 27.—(Charge of tax on mutual profits and repeal of 8 and 9 Geo. 5, c. 40, S. 39 (4).)

3.39 p.m.

Mr. T. WILLIAMS: I beg to move, in page 18, line 30, after the word "surplus," to insert the words:
(other than any profit or surplus specifically assigned to a dividend or discount equalisation fund).
The object of the Amendment will be perfectly clear to the Treasury and to all hon. Members of the House. There has been a good deal of controversy as to whether the Prime Minister made a pledge relating to dividends or to reserves. This Amendment will enable the Treasury to save the Prime Minister from himself, for unless it is accepted dividends, as distinct from reserves, will be taxed, and no amount of shuffling or wriggling will allow the Prime Minister to escape from the charge that his definite specific election pledge has been broken and the confidence of the electors destroyed.
The object of the Amendment, apart from the political honesty or dishonesty implied, is clear. There are large and small co-operative societies. In small industrial areas, where you have miners working three or four days one week and then two days the next week, the prosperity of the co-operative society is more or less determined by circumstances beyond their control. Then we have the manipulation of currencies and the flotsam and jetsam of the price list, and no body of co-operators can determine what the situation is going to be at the end of a dividend period. Therefore, it is the habit in many areas for the directors, if they have enjoyed a good half year, not to pay the maximum dividend available for that period but to set aside a sum as an emergency or equalisation fund to insure, should the following six months be less successful than the last, that with the aid of this additional su mthey will be able to maintain the normal dividend determined by the directors. Therefore any such sum set apart for that special purpose is something apart from the normal
reserve. It would in no way be dodging payment so far as the Department is concerned, but it would enable co-operative societies to cater for the needs of their industrial members as they have in the past without any interference from the Treasury. It may involve little or nothing, so far as the Treasury is concerned.
Those who reside in the City of London area or in large residential areas are unable to appreciate the value of the cooperative dividend to the average working class home. It has been my good or ill fortune to have had to reside for the whole of my life in an industrial area where, sometimes due to mischievousness on the part of employers or employés, the working people become involved in a trade dispute, a strike to-day, a lock-out tomorrow. Mothers of children in these areas have come to expect, almost to depend on, the small surplus in the cooperative society during these periods. No one can estimate the value of the co-operative dividend to a working class home. It enables thousands of families to avoid having recourse to the Poor Law. Many working-class mothers, who have always to carry on on a small miserable wage, look forward to the dividend of the co-operative society, as the ex-service man does to his pension, or the timeserving soldier to (his £3 per quarter, for the purpose of providing boots and clothing for the children; the social value of it cannot be over-estimated. The Amendment merely invites the Treasury to leave things as they are, so far as a dividend equalisation fund is concerned.
I may be asked by the Financial Secretary whether this sum is to apply for a period of five years or 10 years, or what number of years? I may toe asked how will the Revenue Department know that the sum allocated in 1933 is going to be used before 1953? That argument cannot be advanced with any success because the Amendment specifies that the surplus must be assigned to the equalisation fund and used as and when prosperity or depression falls upon the individual cooperative society. A few days ago the hon. Member for Aberdare (Mr. G. Hall) mentioned a case in the Aberdare Division where one co-operative society came to the rescue of another. They are now repaying the money. In such a case as that the proposed tax will constitute a tremendous, almost a too formidable liability to the co-operative society which
took over the depressed society. We do not want that sort of thing to apply in the case of smaller co-operative organisations, where they are trying to arrange their business in such a way that it is not a shilling dividend this year and a half-crown dividend next year, but something subtantial, something regular, something upon which the wives of the members can depend. This money, once it is received from the co-operative society, is immediately expended in consumable goods, the same day. That is the sort of fund which the Chancellor instead of robbing should help to stabilise. If there is one thing from which this country is suffering it is not a lack of foreign speculators in capital goods, but a lack of spending power for immediately consumable goods.
The broad general discussion has already taken place and we know and appreciate the view of the Financial Secretary with regard to the co-operative movement as a whole. He told us that there must be some limit to the idea of mutuality, and he said that it was the function of the House of Commons to limit it. He would limit the co-operative movement within small confines. He talked about 10 men buying a bag of potatoes and then making a profit of one penny, and he said that that was mutuality, but to extend it beyond that was no longer mutuality. We know the real feeling of the Financial Secretary and the Chancellor of the Exchequer on the general question of co-operative taxation and mutuality, and we know that they have responded nobly to vested interests throughout. The Amendment does not ask them to change the decision they have taken, but it appeals to them, even if they rob co-operative members, not to unduly embarrass them in the future. I hope that the Amendment, so modest and so useful to those to whom it applies, which enables the Prime Minister to escape from the taxation of dividends and gives him some chance of going back to Seaham Harbour and telling his constituents that he has not failed to carry out all the statements he has made to them, will be accepted.

3.50 p.m.

Mr. TINKER: I wish to support the Amendment, and I would point out to the House the principle involved in this discussion. The question is shall any part of the surplus of these societies be taxed?
The Raeburn Committee said that dividends should be treated as trade accounts and should not be taxed, and hon. Members on all sides who say that dividends ought not to be taxed must agree with this Amendment. The dividend accrues from the money which is made, after paying overhead charges, on the whole of the trading account of the society. Whatever is over goes in the form of dividend, but that dividend is not uniform. It may amount to 9d. in the £ in one quarter and to 2s. 3d. in the £ in the next quarter. The managements of the societies try to equalise it by striking an average over a period. For instance, I belong to a co-operative society with over 20,000 members. Sometimes the amount available would run to 1s. 6d. in the £; at other times it would run to more than that, but for a number of years that society has paid a uniform rate of 2s. 2d. in the £, which gives greater satisfaction to the body of members than the payment of say 1s. 6d. in one quarter and 2s. 6d. in another quarter.
It is all profit or surplus and if we decided at a general meeting to take say, the whole 2s. 5d. in a quarter we should very easily overcome the difficulty out of which the Chancellor of the Exchequer expects to make some taxation. The societies will probably attempt to do that if our Amendment is not carried. You are not going to stop the co-operative societies, by passing some Resolution in this House, from getting the full benefit of their mutual trading but you are creating a position that will make it very difficult for us in those societies by compelling the societies to pay a greater amount one time than they pay another. In all fairness to people who have joined together for the purpose of getting this benefit the House ought not attempt to defeat that purpose. As it is, Parliament is attempting to give private traders an advantage to which they are not entitled. We have been driven to co-operative trading because of what private traders have done in the past and the co-operative movement has now a great hold in the country as is shown by the fact that there are nearly 7,000,000 co-operators. It is no use attempting to stop the work that they are doing.
I had hoped that the Prime Minister would have spared the time to come here to-day. I know that he is busy but his
own good name is involved in this matter. The Prime Minister made a definite pledge that dividends would not be taxed. He has tried to get out of it and he defended his action when he spoke here not long ago, but he ought to be present to-day to meet our arguments which prove conclusively that the tax will go directly on to the dividends unless this Amendment is passed. The Lord President of the Council who is acting in place of the Prime Minister and doing that work ably, will, I hope, try to clear up the position and try to defend the Prime Minister. I know that the Financial Secretary has no power in this matter. He has come here with everything cut and dried and every point and argument has been put before him and as far as he is concerned our representations on this matter might as well be the wind blowing in the street. But the Lord President of the Council has great power and as one who attends regularly and pays close attention to our Debates I am sure he will weigh up the pros and cons on this question. I hope he will realise the force of the arguments which we are putting forward and will tell the Financial Secretary that this is a case in which he ought to give way.

3.55 p.m.

The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): I have put the hon. Member's request to the Lord President of the Council who authorises me to say that the arguments used have not convinced him.

Mr. BATEY: Tell us why.

Mr. HORE-BELISHA: The hon. Member for Don Valley (Mr. T. Williams) and the hon. Member for Leigh (Mr. Tinker) seek to put co-operative societies in a privileged position. [HON. MEMBERS: "No !"] That is what their Amendment proposes to do. We, on the other hand, have laid down the principle that the treatment given to co-operative societies in relation to Income Tax shall be exactly the same as the treatment given to companies. They are indistinguishable in the trade which they do and, in so far as they make profits, those profits will be taxed. We have, however, exempted what is known as the dividend from taxation. No tax of any kind will be placed upon the dividend which will be allowed as an
ordinary trading expense. In so far, therefore, as a co-operative society returns money to its customers in the form of a dividend, no tax will fall either on the society or on the customers. What hon. Members are seeking to do by this Amendment is to say that if the society puts money to reserve and calls that reserve a dividend equalisation account that shall be exempt from taxation. [HON. MEMBERS: "No!"] Hon. Gentlemen cannot dispute that proposition.

Mr. T. WILLIAMS: Surely the Amendment speaks for itself. The sum referred to in the Amendment is any sum not put to reserve but specifically assigned to a dividend equalisation fund which must be distributed.

Mr. HORE-BELISHA: No, what the Amendment says is that any sums put to a dividend or discount equalisation fund shall be exempt from taxation and you would only have to call your reserve a dividend equalisation account or fund in order to exempt it from taxation. The Amendment says nothing about distribution. I beg of the hon. Member to read his own Amendment. It says, in effect, that when the money is assigned to a fund, which is to be called a dividend equalisation fund instead of by some other name, from that moment the money shall be free from tax. All a society has to do is to describe its reserve in this manner. No question of distribution is raised in the Amendment. To carry out that proposal would be to put the societies in a privileged position and therefore we are not prepared to assent to the Amendment. No limit is placed on the sum which can be put to this equalisation fund. Therefore, the whole of the reserves could be exempted from taxation and the whole of our proposals would fall to the ground. We have gone a long way to meet hon. Gentlemen opposite by putting specifically into the law at their request a provision that the dividend shall be exempt from taxation. In so far as sums are distributed as dividend those sums will be exempt from taxation. In so far as they are used for another purpose, namely, that of being put to reserve they will be taxed, and when this law is carried into effect there will be no distinction whatever between the treatment afforded to the co-operative societies on the one hand and to companies on the other.

4 p.m.

Sir STAFFORD CRIPPS: The hon. Gentleman's argument is hardly convincing when he says that this is an attempt to get preferential treatment for the co-operative societies. The Government themselves have inserted Subsection (3, a), which exempts discounts, rebates, dividends and bonuses granted by the company or society to members. Therefore, they have acknowledged the principle that it is not right to tax moneys, the purpose of which is to provide dividends, rebates or bonuses. Now they come forward and say that if you delay the distribution of that money for six months, it alters in character, and therefore becames taxable. That seems to be a most extraordinary argument.

Mr. HORE-BELISHA: The hon. and learned Member is dealing with the point where he wishes to put the society in a privileged position. This is exactly the position in which ordinary companies are; if they give a trading discount it is allowed; if they put it to reserve, and call it a dividend equalisation fund, it is not allowed.

Sir S. CRIPPS: The hon. Member does not realise that, owing to the manner of conducting the business of co-operative societies, it is desirable for them to have an equalisation account for discounts which would be unsuitable in an ordinary businessfirm. [HON.MEMBERS: "Why?"] I can hardly imagine any firm which is trading not substantially with the same public and its own members, setting aside all its discounts in a pool and pooling those discounts among its customers at the end of the year. A man who buys £1,000 worth of goods wants his discount as part of his single transaction. When you deal with co-operative societies, you are, of course, dealing with the matter on a totally different basis. You are dealing with bodies which even-out discounts over the whole of their membership, and do not give a discount upon each purchase. That is an essential difference, to start with, between co-operative and ordinary trading by ordinary firms. All that this Amendment asks is that precisely that process should be allowed to be carried out by co-operative societies over not only members, but over a period of time as well.
If the hon. Member thinks that this is a mere device to get out of the payment of
Income Tax on reserves, he can put in any words he likes to make it perfectly clear that these moneys so specifically assigned must always be distributed as dividends, and in no other way. This is an Amendment to serve the convenience of millions of people in this country. It is not a question of trying to get out of taxation or anything else, but it would be most inconvenient if this method of taxation forces every co-operative society into the payment of unequal "divis" at unequal periods of time in order not to have taxed that which is expressly not to be taxed under the Act. It is an important matter of convenience of accountancy and distribution, and I suggest to the hon. Member that it is no answer to this to say that it would allow of the reserves being put aside under the cloak of being intended eventually for a dividend or discount equalisation fund. This is a real point of administration by the co-operative societies. Let the hon. Member put in what words he likes, but surely there can be no doubt about the principle, that if the money is, in fact, going to be spent for the purposes set out in Sub-section (3, a), the fact that it is delayed six months, which is about the period it would be delayed in the equalisation account, cannot make any difference whether it ought to be taxed or not. It cannot make any difference, and to slide out on the assumption that this is merely something to evade taxation is to miss the whole point of what is really a serious matter in the administration of co-operative societies.
I am quite sure that neither the right hon. Gentleman nor the Government want unduly to embarrass the co-operative societies by this form of taxation. They have taxed them, and there is an end of it, but, having taxed them, I am sure they do not want to upset their organisation more than is necessary; but unless something of this sort is inserted, it will upset their organisation. It will make it very difficult for them, because it will mean that each half year all the surplus that is ever going to be distributed as dividend must at that moment be distributed, or otherwise it will be classed under the head of reserve. It is in order to avoid that, which is the real difficulty, that we ask the Government, the hon. Gentleman and the Lord President of the Council, who has been appealed to by my hon. Friend, really to consider this problem,
and to see whether there is not some means of getting over this difficulty. I do not believe that it can be done by-administrative order. It will have to be done in some form, and if the Government cannot now accept these words, will they give us an undertaking that in another place words will be inserted to cover this specific point? They may tighten it up as tight as they like so that it can only cover moneys put aside for the purpose of subsequently paying dividends, but we do ask them to consider it, not from the point of view of some attempt to evade the tax, but from the point of view of an attempt to get over a real administrative difficulty of the co-operative societies.

4.8 p.m.

Sir GERALD HURST: The hon. and learned Member has thrown the full force of his great legal authority in support of what I venture to describe as complete fallacies put forward by hon. Members opposite. I think that the main fallacy was disclosed in the speech of the hon. Member who seconded the Amendment. He said that the difference between the outgoings and the earnings of a cooperative society in any period represented "divi." Of course, from a lawyer's point of view, that is quite wrong. The difference between earnings and outgoings represents profits, and no part of the profits can be described as dividend unless, in fact, a dividend is declared and paid. The difference may be £100,000, but if you divide only £80,000, it is impossible to describe the whole £100,000 as dividend, and that is, in fact, the fallacy of this Amendment.
The hon. and learned Member who has just spoken referred to the great embarrassment and difficulties that these proposals inflicted upon co-operative societies. There are no embarrassments and no difficulties at all. If a co-operative society makes a profit of X pounds, at the end of the period the society has an absolute option. It can elect whether it is going to divide the whole of that profit among its members by way of dividends, or whether it is going to place it to reserve. If it wants to avoid taxation and distribute it as dividends, it does not bear the common burden of taxation. If the profit is carried to reserve, it is taxable. The whole Amend-
ment is based on a fallacy. The hon. and learned Member said that what was assigned to the dividend or discount equalisation fund must at some time be distributed as dividend, and therefore must always be regarded as dividend. That is, of course, wrong. The hon. Member who moved the Amendment realised that, because he said that this fund would be utilised for paying dividends as and when occasion presented itself. That is quite true. It may be that this fund will never be used for dividends at all. If bad times come upon the society, and these funds have to be utilised for capital losses, they never will be available.
I agree with the Financial Secretary that this is a device by which co-operative societies may find it easy to avoid their share of the common burden of taxation. I hope the Government will keep their eyes open to the liability to devices of this sort. There is no doubt co-operative societies are very anxious to avoid paying taxes, and they will stick at nothing. This is one of the devices, and I think it is one against which we ought to set our faces. When I say that co-operative societies will stick at nothing, I do not mean the ordinary members of societies, but those who are responsible for propaganda. My Division and the city which I represent abound in co-operators. There are so many members of co-operative societies in my Division that at one time they ran a co-operative candidate, but although my views on this subject were known to all the members of these societies, they have always voted, and I hope will always vote for me: for, while very willing to have the largest possible dividend, they recognise that what passes to reserve is in no way different from what passes to reserve in ordinary trading companies. The reserve funds in ordinary trading companies might be utilised to pay dividends at some future time, but that is no defence for immunity from Income Tax, and I think we are rather apt to be unjust to members of co-operative societies when we imagine that they support the propaganda which is being brought to bear on us. There are hundreds of thousands of co-operators all over the country who are only too glad to bear their part as citizens in a time of national need. Do not let us identify them with those who make use of this
kind of thing to avoid taxation, and I am very glad the Government intend to resist the Amendment.

4.13 p.m.

Mr. MAINWARING: I think there is one thing to which Members of this House, without distinction of party, and without exception, could plead guilty, and that is that none of them are desirous of paying taxes. That is an attitude which is not, as the hon. Member who has just spoken seems to think, exclusively a peculiar quality of co-operators. There seems to be in regard to this Amendment a fear in the mind of the Financial Secretary that the co-operators are seeking to find for themselves a privileged position, but is it not necessary in this connection to bear in mind clearly the basic relation or distinction which exists between a co-operative society and a private trading concern?
Let us imagine a co-operative society on one hand and a private trading company on the other operating in exactly the same area, and that both of them succeed in showing, at the end of a given trading period, a surplus of £l,000. It is clearly admitted in law and in theory, and, in fact, by the Government of the day, that a co-operative society cannot make a profit. The £1,000 in their case is admittedly not a profit. [HON. MEMBERS: "Why not?"] It has been stated in the course of the discussion of this Bill that, so far as people unite together in a society for mutual trading, they cannot make a profit at each other's expense. Therefore, this £1,000 surplus by a co-operative society cannot be regarded as profit. It is £l,000 they have economised in expenses. In the case of the private trading company, they are engaged not in mutual trading with themselves, but in the exploitation of other people, and therefore they make a profit.
The fallacy which fills the mind of the Financial Secretary is that somehow, by some mysterious process, when the members of the co-operative society come to the point of deciding what they can do with this £1,000 surplus, somehow it has become a profit. It is admitted that in its origin it cannot be a profit. If they distribute it immediately to themselves, either per week or per month, it never becomes a profit. But the Financial Secretary says, "If you delay the distribution, then it will be a profit." How
can it be? No amount of delay can make it a profit. By what mysterious process can it become a profit?
All that is suggested in the Amendment is—as has been suggested, you can tie it up as stringently as you like, and make whatever regulations you like to see that it is not devoted to some other purpose—that if a Co-operative Society finds itself able to put one half of that £1,000 on one side, it may be for six months, it shall be permitted to do so for that period, or even for 12 months. In fact the Government have been invited in effect to decide for themselves for how long a period that sum can be laid aside for the purposes mentioned in the Amendment. The real fear that the Government might justifiably hold up for members to consider would be this: Suppose that a portion of that £1,000 were laid on one side for capital purposes. Then we should be compelled to admit that that portion so laid aside had in point of fact changed its character, because it had been devoted to some other purpose. The Government might justifiably argue on those lines, but in so far as distribution is merely delayed there is no possible argument as to a change of character. In fact the money remains what it was from the beginning, an amount that can be devoted to the purposes of distribution among its members as dividend.

4.17 p.m.

Mr. KINGSLEY GRIFFITH: I should like to say a few words in answer to the argument put forward by the hon. and learned Member for Moss Side (Sir G. Hurst), because he spoke as one delivering a legal opinion, which would necessarily carry a good deal of weight in this House or anywhere. I think the hon. and learned Gentleman really put the case for the Amendment as well as anyone has put it. When he was discussing the position in which a co-operative society would find itself when it was deciding what it was to do with the balance between earnings and outgoings for a given year, he said quite truly that it could do one of two things: It could decide either to distribute it as dividends and so avoid taxation, or to put it to reserves and pay taxation. I quite agree that the money in question under this Amendment would be money which would fall under the first of the two alternatives; it would
be money which the co-operative society had definitely decided to distribute as dividend and not to put to reserve.
That being the case; by the argument of the hon. and learned Gentleman the Government really have no case on which to resist the Amendment. Further, in its practical effect what does it mean? It means, I do not say of malice aforethought but as a necessary result, that co-operative societies would be encouraged to adopt unsound methods in the management of their money. It is surely a reasonable business thing to do, and a thing which one would like to see in any business in which one was interested, that the business should not live from hand to mouth, and should not be always distributing everything that fell into its hands, well knowing that the situation in a few months time might make a very different prospect for the next occasion of distribution. A system of taxation which will deliberately encourage unsound methods in a very large business community, with which millions of our fellow countrymen are concerned, is a thing that I should be very loath to see. Therefore, I hope that the Government will give more serious attention to the Amendment. It does not by any means cut at the root of the policy that they have adopted. We are bound to take it as the will of this House that the part of the earnings of co-operative societies to be exempt is the part devoted to dividends and nothing more. On that basis the Government can still give this concession quite logically, I think without great loss to the Treasury and certainly with beneficial effects to a very large trading community.

4.20 p.m.

Sir REGINALD BANKS: I should have thought that there might be something to be said for this Amendment if hon. Members on the Labour Benches could explain what there is in the business of a co-operative society which makes it impossible for the society during the 12 months of its trading to make up its mind what dividend it is to declare. Is there some special technical difficulty in the accountancy of societies that makes it necessary to postpone the decision about the dividend? "This year, next year some time, never." If hon. Members can show that, as the hon. and
learned Member for East Bristol (Sir S. Cripps) said, there really is a practical business difficulty in the way of sharing out profits by way of dividends before the end of the 12 months, there might be some reason for the Treasury considering whether they could not accept this Amendment in a modified form.
The hon. Member for East Rhondda (Mr. Mainwaring) seemed to me to give the whole show away. He went back to a very old theory which I thought we had completely abandoned. He argued that whatever money you make out of your co-operative trading, whether you share it out by way of dividends or put it to reserve, or whether you invest it in funds which are to accumulate, it can in no circumstances whatever be described as profit. That observation, of which we are rather tired by now, drew a good deal of cheering from the Labour benches, and it seemed to me that the observation and the cheers amply justify the suspicion of the Financial Secretary when he said that this Amendment is only a pretext for marking down certain money under a holy and sacred name, and saying that "Some of these days, in certain contingencies and subject to certain possibilities we may or may not use this as dividends, but in the meantime we shall escape taxation."
The hon. Member who has just spoken made one observation which seemed to me to be entirely irrelevant. He said that, of course, co-operative societies might not find it wise in a year of great prosperity to declare a very large dividend, because that year might be succeeded by a lean year. He said that one would consider it reasonable in one's own business to put aside some provision for a rainy day. One might consider that reasonable in the case of one's business, but then one has to pay-Income Tax upon it.

4.24 p.m.

Mr. LEWIS: The Amendment must have been moved for one of two purposes; either it is, as the Financial Secretary assumes, a purely tax-dodging Amendment, or it is a genuine attempt to make it easy for co-operative societies to use part of the profits earned in one year for distribution as dividend in another year. If that is the view that is to be taken, this would seem to be an attempt to destroy still further such
traces of mutuality as may remain in modern co-operative trading, because even the ingenuity of the hon. and learned Member for East Bristol (Sir S. Cripps) would be taxed to show that if a number of persons in this year trade and create a profit, and that profit is given to another number of persons trading in a future year, there is any mutuality in the transaction. It is quite evident that those who are arguing for this Amendment are arguing solely in the interests of those who manage and direct no-operative undertakings; they are not arguing at all in the interests of the great mass of persons who make this trading possible by dealing with co-operative stores.
Does anyone suppose that if this Amendment were explained to the great mass of co-operators in this country they would vote for it? Would any man vote for a proposition that if he deals with a co-operative society this year, and thereby assists it to make a profit, part of that profit which would otherwise come back to him is not to come back to him but is to be kept for the benefit of other persons dealing with the stores in future years? I do not think that the average co-operator is so perfect an altruist that he would agree to that proposition. Speaking for a division in which there are many co-operators, I have no hesitation whatever in opposing the Amendment.

4.26 p.m.

Mr. LANSBURY: I would like to say a few words, because I am not a lawyer, and because I was amazed when I listened to the hon. and learned Members for Swindon (Sir R. Banks) and for Moss Side (Sir G. Hurst). Apparently they agree that there is some reason why dividends should not be taxed. What I cannot for the life of me understand is why, if £80 out of £100 of profit is not taxable, the £20 should be taxable. Where is the reason? No one has yet told us. Apparently the £80 is dividend that is not taxable because it is gained by mutual trading, which the lawyers say cannot be looked upon as profit. Usually profit is dividend in another form; it is only another way of saying the same thing. As a private person, if I make 10 per cent. out of a company and I get the 10 per cent., I say that I make that profit out of the money that I invested. One person would call it dividend and
another profit, but in one's pocket it would be the same thing.
The Government have admitted that up to a certain point an amount of this money is not taxable. All that is agreed. It is agreed even by the hon. and learned Member for Swindon. But by what legerdemain does the balance become something else? No one attempts to answer that question. Even the Financial Secretary, who is very clever and able in carrying on these discussions, has not attempted to answer it. All that he says is, "Oh, it may be used for some other purposes." But the persons who get the part that is paid as dividend use it for a variety of purposes. I will tell the House one way in which some of this money is used. It is a way that I discovered only the other day. Many societies now pay out from their funds a sort of gratuity on the death of a member. It is not insurance and has nothing to do with insurance. It amounts very often to a fair sum of money and is of very considerable value to poor people. Yon are going to tax that. [HON. MEMBEES: "No."] Yes. The co-operative societies, out of their reserve funds, pay on the death of a member certain sums to their relatives or heirs, and that money is of considerable value to poor people. You are going to tax that because it has not been distributed as a dividend. I should like the hon. and learned Member for Swindon to explain the difference between having the money on one particular day or having it on another day.

Sir R. BANKS: I was not arguing whether the distinction between divi, and surplus was right or wrong. I was assuming that that had been decided. I was only saying that there might be some substance in the Amendment if my hon. Friend or anyone else could show me some substantial reason why co-operative societies should not be able, like other people, to make up their minds during the 12 months how they were going to share out dividends.

Mr. LANSBURY: The hon. and learned Member does not do justice to himself. He said quite distinctly that the doctrine of mutuality had gone by the board long ago.

Sir R. BANKS: No.

Mr. LANSBURY: I listened very carefully and although the hon. and learned Member did not use the word "mutuality" he did say that the question of co-operative societies being free from Income Tax had gone by the board. The Government have admitted in this Bill the principle of mutuality, but no one has faced up to the fact why a certain portion of money cannot be taxed and another portion of money can be taxed. The hon. and learned Member has not attempted to answer that question but he falls back upon an extraordinary line of argument. He asked why cooperative societies cannot make up their minds what dividends they are going to pay before their accounts are made up. No business firm ever does that and you have no right to expect co-operative societies to do it. I will put a perfectly simple point and that is, by what legerdemain does a certain portion of a surplus become taxable? If £80 out of £100 which is distributed is sacrosanct because that comes under the definition of mutual trading, why is not the remainder of, the money exempt? I understand that dividends are not taxed because you cannot tax people who are mutually trading, because they do not make profit in the ordinary sense.
It may be that the Government have since invented some new word, but in this Bill the principle laid down was that mutual trading could not be taxed. If the Financial Secretary, the Lord President of the Council and myself decided to buy tea together in bulk and to share it out, we could not be taxed on that, because it has been always held that that is not ordinary trading but is a mutual arrangement. That is the principle that has saved co-operators from being taxed in the way proposed up to now. Now, the Government talk about trade expenses and one thing and another in order to satisfy the demands of the private traders. We have not accepted and we do not accept that. We take our stand on the principle of mutual trading. I want the Financial Secretary to tell us how he differentiates between one sum of money and another. That question has not been answered, and I put it as a perfectly simple question.

4.38 p.m.

Mr. H0RE-BELISHA: I will answer that question at once. The divi. that is distributed is allowed as a trading ex-
pense. It is not allowed on the grounds of mutuality. It is allowed even to private enterprise. A company which distributes the equivalent of a divi. is allowed it as a trading expense. There is no idea of mutuality in it at all. Reserves are taxed, that is, the sums that are not so distributed are taxed, and they will be taxed in a co-operative society as in a company because they are the profits of an incorporated society or company. If a company is incorporated it is a separate entity, it is making profits and those profits must pay their proper contribution towards maintaining the services of the State. That is the whole of the principle. The right hon. Gentleman asked me another question. He said that he had just heard of a particular society distributing money as funeral expenses.

Mr. LANSBURY: I did not put it in that way.

Mr. HORE-BEL1SHA: Well, as a gratuity on the death of one of its purchasers.

Mr. LANSBURY: One of its members.

Mr. HORE-BELISHA: One of its members purchasing from the society. I am advised—I am not speaking of this particular case, because I have not the details before me—that there is nothing in what the right hon. Gentleman has said to disentitle that society from taking that sum into account for the purposes of Income Tax. There is nothing that is going to put these societies in any way in a different position from that of an incorporated company. If the right hon. Gentleman contends that there should be something differentiating the co-operative societies from incorporated companies he is claiming for them a privileged position. That is the answer to him and the answer to the hon. Member for West Middlesbrough (Mr. K. Griffith). Hon. Members cannot support this Amendment or claim any concession for these societies unless they claim to put them in a privileged position. They will be on exactly the same footing as any other incorporated companies.

Mr. LANSBURY: It is perfectly certain that the societies will have £1,200,000 less to use in bonuses such as those I have mentioned.

Mr. MAINW1ARING: I should like to know whether the Financial Secretary states definitely and clearly on behalf of the Government that any amount of surplus that may be realised by mutual trading by any number of persons cannot in any circumstances be regarded as other than profit. That is clearly involved in his statement.

4.39 p.m.

Mr. DENMAN: On a point of Order. The Amendment deals purely with the limited point of setting up an equalisation fund, but the occupants of the front benches on both sides have somewhat enlarged the scope of the discussion. I should be glad to know whether the House will also be allowed to range over the whole question on the merits of mutuality.

Mr. SPEAKER: The hon. Member asks me on a point of Order whether I shall allow equal latitude to other hon. Members that I have allowed to speakers from the front benches. My reply is that I shall do so.

4.40 p.m.

Mr. LOGAN: I am interested in the statement made by the Financial Secretary in regard to what are known as surpluses, I call them profits, made by a mutual society. He definitely assures the House that there will be no taxation of dividends. Therefore, it follows that, if in any year any profit or surplus may accrue to a mutual trading society, that society, if they feel inclined at the annual meeting, can declare that the surplus must be distributed in the form of dividends. It would be right for the whole of the amount to be so distributed and therefore it would escape the payment of any tax. If that can be accepted as the definite policy of the Government in regard to the trading of a co-operative society, what is there wrong in a society, having decided to allocate that money for the purpose of dividends, coming forward and saying that they have declared a dividend but they would like an equalisation fund for the benefit of their members in order to secure an equal dividend for a number of years. Is there anything wrong in such a principle? Is it not fair and honest trading that if a dividend cannot be taxed and you have allocated money for the specific purpose of dividends there should be the domestic right to say that a particular dividend, which the members
of the Government admit they have no right to tax, should be held over for the purposes of an equalisation fund? If it was a quibble to get out of taxation it would be a different matter, but we have been told that there can be inserted a protective clause so that if the money was being wrongly used the right of taxation would be effective. I do not see why any opposition can be raised to the Amendment. It is only reasonable that the society ought to be able from the point of view of equalisation to accumulate profits ranging over a number of years in order to bring about something like equality of dividends.

4.44 p.m.

Mr. HARCOURT JOHNSTONE: The argument has been brought back by the hon. Member for the Scotland Division (Mr. Logan) from the wider range. I am not a lawyer and I have listened with some puzzlement to the verbal felicities of lawyers in regard to the three or four sides of this question. The matter reduces itself, I should have thought, to something very simple. One hon. Member behind me adduced an argument which in certain circumstances would have had great weight. He said that if the Amendment were incorporated in the Bill it would destroy what little there was of mutuality in the operation of co-operative societies. I may not agree with that argument, but I would point out that the Government have abandoned the principle which Governments held for many years that mutuality does enter into the trading of co-operative societies. If that be the case, the question of mutuality no longer arises, and, therefore, with the offer of the Opposition to accept any words which may enforce the payment of any sums set aside in dividends within a specific time, I am frankly unable to understand on what ground the Financial Secretary can continue to resist the Amendment. He has not yet addressed any argument to the House rebutting the general position which the Movers of the Amendment assume, that this money which they propose to set aside will be paid out in dividend and, if he likes to put in words to that effect, will be paid out under Statute within a specific time.

Mr. HORE-BELISHA: Would the hon. Member apply that to private companies?

Mr. JOHNSTONE: That is not a proposal which I am bringing forward on this occasion, but if the Financial Secretary thinks it is just, he may insert it in the Bill, if he so wishes. As far as this Amendment is concerned, I am unable to see—and I do not believe the hon. and learned Member for Swindon (Sir R. Banks) really disagrees—how, if the money is going to be paid out in dividend and is withheld for six months, it therefore becomes taxable, though in the meantime it has not been used for the ordinary purposes for which trading reserves are used. Unless the Financial Secretary can produce some fresh argument, I cannot understand how those who believe that co-operative societies should not be penalised, but should be treated with fairness, can do other than vote for the Amendment. It is very strongly held in many parts of the country that this portion of the Government's legislation is not aimed directly towards the acquisition of revenue for their own purposes, but rather towards penalising political organisations which they think are in opposition to them. That suspicion exists, whether it be well founded or not, and to reject an Amendment of this description on grounds which it is difficult to understand would only give added weight to that suspicion and, in my opinion, do the Government more harm than good. I would ask the Financial Secretary to consider the Amendment afresh, and to see if, before the final stage of the Bill is reached, he cannot agree upon some form of words that will allow sums which are set aside to remain free from taxation, as he proposes to allow dividends which are paid out immediately to be free from taxation.

4.50 p.m.

Mr. DAVID REID: I understand that the Financial Secretary to the Treasury does not rely upon the principle of mutuality, but the Oposition view is that the principle of mutuality is simply that of people trading among themselves, and that such people cannot make profits, because what they pay and what they get is all their own money. In a discussion with some co-operators, I have been told that that is the serious distinction between a limited liability company and a co-operative society, both of which are legal entities. The distinction
is that in the co-operative society the surplus goes to the members, and in the limited company it may go to the members if it happens to go to the shareholders, but it may go outside. It seems to me that that is the whole distinction between taxing dividends and taxing reserves. What is distributed in dividends is distributed to the actual members of the society at the time or immediately afterwards, but what is carried to reserve becomes really part of the trading capital of the society, or at any rate it will in fact be distributed to people from whose trading it did not arise. Members come and go, the membership fluctuates, and sums carried to reserve may often go to people who had no part in the transaction from which the profits arose. Consequently, the principle of mutuality does not apply at all in the case of these sums which are carried to reserve for the purpose of distribution as future dividends.

4.52 p.m.

Mr. J. JONES: I cannot claim to be an expert in the financial arrangements of these societies. I only happen to be a member of two co-operative societies, one of which is a non-dividend-paying society on principle, and the other of which is a dividend-paying society. One, of course, there is no trouble about, and the right hon. Gentleman cannot get his hands on us, because our money goes towards maintaining a fund to win seats for labour. I suppose the profits that we make in that particular society will eventually be sequestrated by Order-in-Council, but I am not afraid of that possibility, because we shall find other ways and means of dealing with them, and if I were an orthodox co-operator, I would soon find a way out of this difficulty. I should not have any dividends or balances, but I should hand the surplus all back to the members direct, in the form of reduced prices for the goods which they buy. Then we should give the private traders who have been up against us such a blow that they would never recover.
Hon. Members must remember that we have gone through a bad period of trade depression, and some of the strongest co-operative societies have suffered materially from that depression. Where would those societies have been now if they had not been careful in the days
when they were prosperous? There would have been no money at all for any dividends. Take the men in South Wales, Durham, and Northumberland. Where would they have been during the depression if the co-operative societies had not been careful in the days of prosperity, so as to enable them to have something to fall back upon? What are the Government going to get out of this tax? Will it amount to anything? It will not amount to the value of a jingle on a tombstone. For the sake of a few thousand pounds, more or less, you are going to sacrifice a principle which has been admitted by all to be a sound principle. I have heard hon. Members opposite in the days gone by, though, of course, we do not expect them to be as honest as they used to be, praising thrift among the working classes.
Where is this policy of the Government going to end? The co-operative societies are probably among the most thrifty people in the country. They have been built up by great sacrifices. In my own district they have built up a society which is one of the biggest trading concerns in the country, as a result of the sacrifices of those who were the early pioneers and who educated their fellows to follow their example. Is this policy of the Government's going to stop at the co-operative societies? There are other thrift organisations in the country as well as the cooperative societies. Where will our friendly societies be?

Mr. SPEAKER: The hon. Member must keep to the Amendment.

Mr. JONES: Well, the principle may be extended considerably. We have small local organisations dealing with their own members; we have shop societies, which are similar organisations. Are they all to find themselves—

Mr. SPEAKER: The hon. Member is again straying from the Amendment.

Mr. JONES: I will not say anything more about it. I am a member of two kinds of co-operative society, one, as I say, dividend-paying and the other non-dividend-paying, and I cannot understand the philosophy which says that one part of our money is taxable and the other is not. Up to now I have had no real explanation of it. The money all comes out of the member who buy the goods from the stores. A part of it is used to pay dividend back to the members
direct, and the other is used for a reserve fund to guarantee the preservation of future possibilities. Private companies do the same thing. [An HON. MEMBER: "They are taxed on it!"] Yes, but there is a difference. The co-operative societies consist of people who are banded together for mutual trading. There are no foreign shareholders in cooperative societies. They are all living together in the same community, buying their goods mutually, to the common advantage, whereas to-morrow morning I could take up any London newspaper, and I could find a wholesale invitation to anybody, from Land's End to John o' Groats, and from John o' Groats to California, to subscribe to the financial responsibilities of particular companies. They all come in, but here in England we have our co-operative movement, which is a purely British movement. There is no question of foreign control or influence. I saw a directorship list this morning of a new company about to be formed, and half of them are foreigners. The chairman is a Britisher. Naturally, he would be, because waving the Union Jack will bring in the money.
We say that this is not only a question of finance, but a matter of trying to cripple those whom the Government think will be their political opponents in the future. This Amendment ought to be carried as a compromise between two positions. We as a Labour party have no interest merely in co-operation in the ordinary trading sense of the term, but we desire to preserve the principle of co-operation in so far as the workers banded together have a right to distribute their money among themselves.

5.0 p.m.

Mr. McCORQUODALE: I do not propose to follow the last speaker into arguments about Socialism or the foreign ownership of capital. I want to explain why I who opposed the whole principle of the taxation of co-operative societies which the Government have introduced feel that the proposal in the Amendment cannot be justified from the point of view of those of us who believe in the mutuality principle and cannot be justified from the other side by those who believe that the dividend is merely a trade discount or expense. If money is going to be put into a dividend equalisation fund for dividends in future years it defies the law of mutuality as it will
go to people who do not earn it by mutual trading. It will go to other people, because obviously no member trades in exactly the same amount for two or more years together. If, on the other hand, it is to be regarded as a discount, it is absurd that a discount should be paid to a man not trading that year with the society. A discount is obviously granted on account of actual goods sold, and therefore I think that on every principle this proposal does not hold water.

5.2 p.m.

Mr. PRICE: There seems to be some dishonesty in the attitude of the Financial Secretary who is defending this Bill in stating the position as he has done this afternoon. The Prime Minister made a statement about a fortnight ago in which he made the position clear. He denied a statement that had been made in the Press as to his pledge in the General Election, and said that he had agreed that he would take no part in the taxation of dividends of co-operative societies. This Amendment has no reference to reserves such as are envisaged by the Government in the Bill, but it asks that a fund which is formed for the equalisation of dividends should be exempt from taxation. I am a member of a co-operative society which pays part of the benefits to which I am entitled at death. It is a very good proposal. In order to provide for that they withhold from me a part of my dividend. Is it suggested that this House is entitled to tax that fund? If, as the Financial Secretary endeavoured to make out to-day, the co-operative societies are in some privileged position, why were not Members of the Government men enough to tell them so at the General Election? If the Government intended to take this attitude towards them, why did they not make it part of the political propaganda in the General Election? Scores of Members opposite would not have been here if they had done that. We say in this Amendment that if we set aside a reserve to equalise dividends year by year it should not be taxed. When there is so much depression it is a good thing that co-operative societies should put money to reserves, not because they want money to invest, but in order to make sure that there will be an assured income for co-operative members in bad times. That is all that this Amendment is ask-
ing, and, if hon. Members want to be true to the undertaking given by the Prime Minister, they will vote for it. I wish he were here so that we should know what he thinks about the Amendment.
This Amendment simply asks what the Government said they would do when the Finance Bill was discussed on Second Reading, and we appeal to them to be fair to co-operative members. If this attitude is maintained when we are endeavouring to bring in an Amendment which complies with the request made from the Front Bench when the Bill was being discussed on Second Reading, we shall be able to form only one conclusion, namely, that this is a definite attempt while the Government are in power to take advantage of the opportunity to impose a form of taxation that was never mentioned in the General Election, and which they dared not even mention. No Government has a right to alter the form of taxation unless they have given the electorate to understand that they propose to do it, so that democracy can have an opportunity of saying whether it shall be done. The Government were not men enough to take that position. They first say that they will not tax dividends, and when we ask that a reserve to equalise dividends year by year should not be taxed, they say, "We are going to tax the lot." We ask the Government to be fair in this issue and to carry out the undertaking of the Prime Minister. He has given many undertakings that have not been carried out. This undertaking was given a fortnight ago, and we ask the Government to keep it.

5.8 p.m.

Mr. BUCHANAN: The hon. Member for Sowerby (Mr. McCorquodale) said that he had always been opposed to any encroachment on the principle of mutuality but that he could not see how this proposal could be justified. I think that it can be justified on a number of grounds. We must bear in mind that the co-operative- societies have built up their business over a long period of years by a loyal observance of strict business methods. If they are to be given a chance to build up their business they must within the realm of present-day society, be allowed to do so with an eye to the future. Among other things, cooperative societies have been faced over a period of years with violent fluctua-
tions in trade. Nowhere has that happened more than in many of the big cities and industrial centres, and for many years co-operative societies in most of those centres have formed what they call a dividend equalisation fund. The purpose of that fund was to save them from violent fluctuations. It may be true that a member helps to build up the dividend for a particular year, but it is not true in actual fact. A society's business is built up by members over long periods of years. For instance, a member who buys goods from a society when it is paying a small dividend may make a far greater contribution to the future well-being of that society than a member who merely purchases from the society when it becomes popular.
Everyone who knows friendly society and trade union work knows that their funds cannot be allocated every 12 months or even every few years. These funds have been formed by the efforts of members, possibly in a period when the society was being built up and when practically no dividend was available at all. You cannot merely take the dividend which is built up over 12 months' period. Societies save themselves from violent fluctuations by putting by reserves. I was a member of a board which was faced with this position. A great number of their members were thrown out of work and their purchasing power greatly depreciated in consequence. If alongside that the dividend, which was 2s. 2d. in the £, had been decreased to 1s. 4d., large numbers of members would have thought that the society was going wrong and would have withdrawn not merely their trade but their capital. The first plight was bad -enough, but the second would have been almost beyond resistance. In order to avoid violent fluctuations of that kind the co-operative societies have over a period of years formed an equalisation fund, and in good times have never allowed the dividend to go too high. In Glasgow from 1915 to 1920 trade expanded out of all knowledge. Everybody was working and wages were high. It would have been possible in those years for dividend paying societies to pay extremely high dividends, but the societies were wise and formed a fund which would save violent fluctuations in future and avoid the necessity of decreasing dividends, and thus not merely losing members but capital as well during bad times.
The principle has been settled in this House that dividends are not to be touched. That is not now argued. The Amendment says that in order to allow co-operative societies to equalise their dividends and not to throw the amount of dividend open to violent attacks of changes in trade and other factors, they shall be able to form a fund to be used for no other purpose than the equalisation of dividends. The Amendment says that these funds shall be immune from any taxation. To that principle I can see no answer at all. It is a common-sense principle once you have agreed not to tax dividends. The Opposition would have liked no tax on reserves at all. Like wise men in opposition, they are seeking to modify the brunt of the attack on the cooperative societies. I have no desire to go into the question of the Prime Minister's pledges, but this is not the first time he has broken a pledge, only on other occasions he was in a different Government and consequently he was allowed to do it. All I say is that what is being asked for by the Opposition in this Amendment is an elementary fair principle, which ought to be accepted in order to allow the co-operative societies to carry on in a businesslike fashion. The cost of conceding this Amendment must be very small, and could not cost the Exchequer much. It would allow the societies to function decently and I hope the Government will accept it.

5.16 p.m.

Mr. PEAT: I only rise because although I, like previous speakers, am rather uncertain of the effectiveness of the Government's policy in regard to taxing co-operative societies, I feel that this Amendment is certainly unnecessary. If a dividend is to be treated as a trade expense, whenever a dividend is paid it will escape taxation. Let us assume that in 1934 a co-operative society puts an amount to reserve for the purpose of equalising dividends, and that 1935 turns out to be a bad year and they use a certain amount of that reserve to equalise the dividend. The amount of that dividend paid in 1935 will either increase the loss for that year or will turn an assessable profit into a loss for that period. In other words, dividends, when they are paid, will escape taxation under the present law, which allows losses to be carried forward for six years, or under a claim under Section 34. I would ask the Financial Secretary
whether I am not right in making this statement that the Government's proposals, quite apart from this Amendment, will always ensure that dividends, whether paid out of current profits or

out of amounts put to reserve in the past, will he free of tax.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 72; Noes, 268.

Division No. 228.]
AYES.
[5.19 p.m.


Adam, D. M. (Poplar, South)
George, Megan A. Lloyd (Anglesea)
Maclean, Nell (Glasgow, Govan)


Aske, Sir Robert William
Granville, Edgar
Mainwaring, William Henry


Attlee Clement Richard
Grenfell, David Rees (Glamorgan)
Mallalieu, Edward Lancelot


Banfield, John William
Griffith, F. Kingsley (Middlesbro'.W.)
Mander, Geoffrey le M.


Batey, Joseph
Griffiths, T. (Monmouth, Pontypool)
Mason, David M. (Edinburgh, E.)


Bernays, Robert
Grundy, Thomas W.
Owen, Major Goronwy


Bevan, Aneurin (Ebbw Vale)
Hamilton, Sir R. W.(Orkney & Zetl'nd)
Parkinson, John Allen


Brown, C. W. E. (Notts., Mansfield)
Harris, Sir Percy
Pickering, Ernest H.


Buchanan, George
Hirst, George Henry
Price, Gabriel


Cape, Thomas
Holdsworth, Herbert
Rea, Walter Russell


Cocks, Frederick Seymour
Janner, Barnett
Roberts, Aled (Wrexham)


Cove, William G.
Jenkins, Sir William
Salter, Dr. Alfred


Cowan, D. M.
Johnstone, Harcourt (S. Shields)
Samuel, Rt. Hon. Sir H. (Darwen)


Cripps, Sir Stafford
Jones, Henry Haydn (Merioneth)
Sinclair, Maj. Rt. Hn. Sir A.(C'thness)


Curry, A. C.
Jones, J. J. (West Ham, Silvertown)
Smith, Tom (Normanton)


Daggar, George
Jones, Morgan (Caerphilly)
Tinker, John Joseph


Davies, David L. (Pontypridd)
Kirkwood, David
Wedgwood, Rt. Hon. Josiah


Davies, Rhye John (Westhoughton)
Lansbury, Rt. Hon. George
White, Henry Graham


Dobble, William
Lawson, John James
Williams, Edward John (Ogmore)


Edwards, Charles
Leonard, William
Williams, Dr. John H. (Lianelly)


Evans, David Owen (Cardigan)
Logan, David Gilbert
Williams, Thomas (York, Don Valley)


Evans, R. T. (Carmarthen)
Lunn, William
Wood, Sir Murdoch McKenzie (Banff)


Foot, Dingle (Dundee)
Macdonald, Gordon (Ince)



Foot, Isaac (Cornwall, Bodmin)
McEntee, Valentine L.
TELLERS FOR THE AYES.—


George, Major G. Lloyd (Pembroke)
Maclay, Hon. Joseph Paton
Mr. John and Mr. Groves.


NOES.


Acland-Troyte, Lieut.-Colonel
Caporn, Arthur Cecil
Ford, Sir Patrick J.


Adams, Samuel Vyvyan T. (Leeds, W.)
Castlereagh, Viscount
Forestier-Walker, Sir Leolln


Aitchison, Rt. Hon. Craigle M.
Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Fox, Sir Gifford


Albery, Irving James
Chamberlain, Rt.Hn.Sir J. A. (Birm.,W)
Fraser, Captain Ian


Allen, Sir J. Sandeman (Liverp'l. W.)
Chapman, Col. R. (Houghton-le-Spring)
Fuller, Captain A. G.


Amery, Rt. Hon. Leopold C. M. S.
Chapman, Sir Samuel (Edinburgh, S.)
Gault, Lieut.-Col. A. Hamilton


Anstruther-Gray, W. J.
Chorlton, Alan Ernest Leofric
Gibson, Charles Granville


Apsley, Lord
Christie, James Archibald
Gilmour, Lt.-Col. Rt. Hon. Sir John


Astbury, Lieut.-Com. Frederick Wolfe
Clarke, Frank
Gluckstein, Louis Halle


Astor, Maj. Hn. John J. (Kent, Dover)
Clarry, Reginald George
Goff, Sir Park


Atholl, Duchess of
Clayton, Sir Christopher
Goodman, Colonel Albert W.


Bailey, Eric Alfred George
Colville, Lieut.-Colonel J.
Gower, Sir Robert


Baldwin, Rt. Hon. Stanley
Conant, R. J. E.
Graham, Sir F. Fergus (C'mb'rl'd, N.)


Balniel, Lord
Cook, Thomas A.
Grattan-Doyle, Sir Nicholas


Banks, Sir Reginald Mitchell
Cooke, Douglas
Gretton, Colonel Rt. Hon. John


Barclay-Harvey, C. M.
Cooper, A. Duff
Grigg, Sir Edward


Barrle, Sir Charles Coupar
Copeland, Ida
Grimston, R. V.


Beauchamp, Sir Brograve Campbell
Craddock, Sir Reginald Henry
Guest, Capt. Rt. Hon. F. E.


Beaumont, M. W. (Bucks., Aylesbury)
Crooke, J. Smedley
Gunston, Captain D. W.


Beaumont, Hon. R.E.B. (Portsm'th, C.)
Crookshank, Col. C. de Windt (Bootle)
Hacking, Rt. Hon. Douglas H.


Belt, Sir Alfred L.
Cross, R. H.
Hales, Harold K.


Benn, Sir Arthur Shirley
Cruddas, Lieut.-Colonel Bernard
Hamilton, Sir George (llford)


Bennett, Capt. Sir Ernest Nathaniel
Dalkeith, Earl of
Hanbury, Cecil


Betterton, Rt. Hon. Sir Henry B.
Davidson, Rt. Hon. J. C. C.
Hanley, Dennis A.


Birchall, Major Sir John Dearman
Dawson, Sir Philip
Hannon, Patrick Joseph Henry


Borodale, Viscount
Denman, Hon. R. D.
Hartington, Marquess of


Boulton, W. W.
Despencer-Robertson, Major J. A. F.
Hartland, George A.


Bowyer, Capt. Sir George E. W.
Dixon, Rt. Hon. Herbert
Harvey, George (Lambeth, Kenningt'n)


Boyce, H. Leslie
Donner, P. W.
Haslam, Henry (Horncastle)


Bracken, Brendan
Doran, Edward
Headlam, Lieut.-Col. Cuthbert M.


Braithwaite, Maj. A. N. (Yorks, E.R.)
Dower, Captain A. V. G.
Hellgers, Captain F. F. A.


Braithwaite, J. G. (Hillsborough)
Drewe, Cedric
Henderson, Sir Vivian L. (Chelmsford)


Briscoe, Capt. Richard George
Duckworth, George A. V.
Heneage, Lieut.-Colonel Arthur P.


Broadbent, Colonel John
Duggan, Hubert John
Herbert, Capt. S. (Abbey Division)


Brocklebank, C. E. R.
Eady, George H.
Hills, Major Rt. Hon. John Waller


Brown, Col. D. C. (N'th'l'd, Hexham)
Edmondson, Major A. J.
Hore-Belisha, Leslie


Brown, Brig.-Gen. H.C. (Berks., Newb'y)
Ellis, Sir R. Geoffrey
Hornby, Frank


Browns, Captain A. C.
Eimley, Viscount
Horobin, Ian M.


Buchan, John
Emmott, Charles E. G. C.
Horsbrugh, Florence


Buchan-Hepburn, P. G. T.
Emrys-Evans, P. V.
Howitt, Dr. Alfred B.


Burgin, Dr. Edward Leslie
Erskine, Lord (Weston-super-Mare)
Hudson, Capt. A. U. M. (Hackney, N.)


Burnett, John George
Essenhigh, Reginald Clare
Hudson, Robert Spear (Southport)


Cadogan, Hop. Edward
Everard, W. Lindsay
Hume, Sir George Hopwood


Campbell, Sir Edward Taswell (Brmiy)
Fielden, Edward Brockiehurst
Hunter-Weston, Lt.-Gen. Sir Aylmer


Hunt, Sir Gerald B.
Newton, Sir Douglas George C.
Somerville, Annesley A. (Windsor)


Jackson, Sir Henry (Wandsworth, C.)
Nicholson, Rt. Hn. W. G. (Petersf'ld)
Sotheron-Estcourt, Captain T. E.


Jamieson, Douglas
Normand, Wilfrid Guild
Southby, Commander Archibald R. J.


Jesson, Major Thomas E.
Nunn, William
Spears, Brigadier-General Edward L.


Joel, Dudley J. Barnato
Ormsby-Gore, Rt. Hon. William G. A.
Spencer, Captain Richard A.


Johnston, J. W (Clackmannan)
Patrick, Colin M.
Spender-Clay, Rt. Hon. Herbert H.


Jones, Lewis (Swansea, West)
Peake, Captain Osbert
Stanley, Lord (Lancaster, Fylde)


Ker, J. Campbell
Peat, Charles U.
Stanley, Hon. O. F. G. (Westmorland)


Kerr, Hamilton W.
Percy, Lord Eustace
Steel-Maitland, Rt. Hon. Sir Arthur


Kimball, Lawrence
Perkins, Walter R. D.
Storey, Samuel


Knox, Sir Alfred
Petherick, M.
Strauss, Edward A.


Lamb, Sir Joseph Quinton
Peto, Sir Basil E. (Devon, Barnstaple)
Strickland, Captain W. F.


Law, Richard K. (Hull, S.W.)
Peto, Geoffrey K(W'verh'pt'n, Bllst'n,)
Stuart, Lord C. Crichton-


Leech, Dr. J. w.
Pickford, Hon. Mary Ada
sueter, Rear-Admiral Murray F.


Lees-Jones, John
Pike, Cecil P.
Thompson, Luke


Leighton, Major B. E. P.
Power, Sir John Cecil
Thorp, Linton Theodore


Lewis, Oswald
Pownall, Sir Assheton
Todd, A. L. S. (Kingswinford)


Liddall, Walter S.
Ramsay, Alexander (W. Bromwich)
Train, John


Loeker-Lampeon, Rt. Hn. G. (Wd.Gr'n)
Ramsay, Capt. A. H. M. (Midlothian)
Tryon, Rt. Hon. George Clement


Lockwood, John C. (Hackney, C.)
Ramsay. T. B. W. (Western Isles)
Turton, Robert Hugh


Lumley, Captain Lawrence R.
Ramsbotham, Herwald
Vaughan-Morgan, Sir Kenyon


Lymington, viscount
Ramsden, Sir Eugene
Wallace, Captain D. E. (Hornsey)


Lyons, Abraham Montagu
Rawson, Sir Cooper
Ward, Irene Mary Bewick (Wallsend)


MacAndrew, Lieut.-Col. C. G.(Partick)
Reld, David D. (County Down)
Ward, Sarah Adelaide (Cannock)


MacAndrew, Capt. J, O. (Ayr)
Reld, William Allan (Derby)
Wardlaw-Milne, Sir John S.


McCorqucdale, M. S.
Rhys, Hon. Charles Arthur U.
Warrender, Sir victor A. G.


Macdonald, Sir Murdoch (Inverness)
Ropner, Colonel L.
Waterhouse, Captain Charles


McKie, John Hamilton
Rosbotham, Sir Samuel
Watt, Captain George Steven H.


Macquisten, Frederick Alexander
Ross Taylor, Walter (Woodbridge)
Wayland, Sir William A.


Maitland, Adam
Ruggles-Brise, Colonel E. A.
Wells, Sydney Richard


Manningham-Buller, Lt.-Col. Sir M.
Runge, Norah Cecil
Weymouth, Viscount


Margesson, Capt. Rt. Hon. H. D. R.
Russell, Alexander West (Tynemouth)
Whyte, Jardine Bell


Marsden, Commander Arthur
Russell, Hamer Field (Sheffield, B'talde)
Williams, Herbert G. (Croydon, S.)


Mayhew, Lieut.-Colonel John
Russell, R. J. (Eddlsbury)
Wills, Wilfrid D.


Meller, sir Richard James
Rutherford, Sir John Hugo (Liverp'l)
Wilson, Lt.-Col. Sir Arnold (Hertf'd)


Merrlman, Sir F. Boyd
Salt, Edward W.
Wilson, Clyde T. (West Toxteth)


Mills, Sir Frederick (Leyton, E.)
Samuel, Sir Arthur Michael (F'nham)
Windsor-Cive, Lieut-Colonel George


Mills, Major J. D. (New Forest)
Sandeman, Sir A. N. Stewart
Winterton, Rt. Hon. Earl


Mitchell, Harold P.(Br'tf'd & Chisw'k)
Sanderson, Sir Frank Barnard
Womersley, Walter James


Mitchell, Sir W. Lane (Streatham)
Shaw, Helen B. (Lanark, Bothwell)
Wood, Rt. Hon. Sir H. Kingsley


Monsell, Rt. Hon. Sir B. Eyres
Slater, John
Worthington, Dr. John V.


Morgan, Robert H.
Smiles, Lieut.-Col. Sir Walter D.
Young, Rt. Hon. Sir Hilton (S'v'noaks)


Morris, John Patrick (Salford, N.)
Smith, Louis W. (Sheffield, Hallam)



Morris-Jones, Dr. J. H. (Denbigh)
Smith, R. W. (Ab'rd'n & Kinc'dlne, C.)
TELLERS FOR THE NOES.—


Morrison, William Shephard
Smith-Carlngton, Neville W.
Lieut.-Colonel Sir A. Lambert Ward


Munro, Patrick
Smithers, Waldron
and Mr.Blindell.


Nation, Brigadier-General J. J. H.
Somervell, Donald Bradley

5.29 p.m.

Mr. LEONARD: I beg to move, in page 18, line 30, after the word "surplus," to insert the words:
(other than any profit or surplus allocated by a society towards the reduction of a suspense account existing on the first day of April, nineteen hundred and thirty-three, and arising out of losses sustained prior to that date).
This point is different from that which has been discussed already, and in order to get it into its proper perspective I would like to refer to the position which unemployment occupies in the country. We know that certain parts of the country are affected by it to a greater degree than others, and a number of hon. Members have laboured for quite a while in this House in an endeavour to get special recognition for what are called "the depressed areas." They have discussed various proposals which they have felt would be of advantage to them, and the position of those depressed areas has been brought under review. In general, business there has been bad. Those who
have travelled through them must have been impressed with the aspect presented by many of the shopping centres there. Many of those shopping centres are not confined to one class of person. They have a varied clientele from which they do their trade. Co-operative societies practically depend upon working-class people coming into their shops to trade, people who to an amazing degree have been the victims of reduced purchasing power. Because of that, some co-operative societies in those areas have been involved in substantial losses. In the depressed areas, many societies have granted credit to the unemployed, and it is now recognised that recovery of the money is practically impossible—if any hope exists, it is very slight. Some of the societies have therefore carried those losses to a suspense account, to which it has been the practice to allocate a portion of trading surplus for the reduction of that suspense account.
We suggest in this Amendment that it is reasonable to ask that tax should not
be levied upon sums so allocated. J want to keep this argument as simple as I can, and I think that what I have said covers the attitude which we desire the House to adopt in regard to these suspense accounts. I am well within the truth in stating that any losses that were incurred by the revenue would be negligible in comparison with the advantages that have been gained through the work which has been done by co-operative societies in the past. In order to strengthen that contention, I propose to give one quotation from the evidence before the Committee of Inquiry to show that some consideration should be placed in the balance against any loss which may be suffered by the national revenue as a result of the adoption of this Amendment. I shall read part of the evidence that was submitted on behalf of the Parliamentary Committee by Mr. Alexander who referred to Sheffield and who said in paragraph 1033:
If I may revert to Sheffield for a particular period in illustration of what I have in mind, in 1921 we had roughly 60,000 unemployed. We had exhausted the whole of our possible rate revenue"—
he is speaking for the City of Sheffield—
for Poor Law purposes, we were forced to borrow from the Ministry of Health, not for capital expenditure but for the current expenditure of relief of the able-bodied unemployed, and in the course of 1921–1922 we had to borrow £1¼ million sterling. We are to-day in 1932 paying a 6d. rate for the liquidation for that debt for current expenditure on Poor Law in 1921-1922.
That was the position he displayed that the City of Sheffield was placed in.
In that same period we paid out in the City of Sheffield in the co-operative societies, to the very great damage at the time of their financial stability, something approaching £1,000,000. The extra charge upon the locality"—
I suggest that this is well put—
would undoubtedly have been almost double but for the existence of the thrift results of the Co-operative members in that distressed area.
That is the only part of the country to which I am going to refer. Similar activities on the part of co-operative societies throughout Great Britain in the last 11 years have been responsible for relief in this form of well over £400,000,000. I respectfully submit that that is an excellent contribution to put aaginst any loss that might be sustained by the Revenue Department in granting
a recognition for suspense accounts such as I have asked for in this Amendment.

5.36 p.m.

Mr. CHARLES BROWN: I beg to second the Amendment. I do not think that it is necessary to add very much to the admirable speech which has been made by the hon. Member for St. Rollox (Mr. Leonard) in moving it, and I hope that the Financial Secretary to the Treasury will be able to tell us that the Government are prepared to make a concession. They have made no concession whatever in regard to the co-operative tax. The case which has just been stated merits very serious consideration by the Financial Secretary to the Treasury. Everybody knows that the vast mass of the membership of the co-operative societies consists of the working-class, that in times of trade depression the purchasing power of the working-class declines, and, in certain areas, owing to exceptional circumstances—take mining areas as an illustration—it has been necessary for societies to give credit to their members. The long-continued economic depression has made it impossible for members of societies to meet their obligations, and consequently the societies have set up a suspense account out of their surpluses, hoping to liquidate their liabilities in the end. The Government might very well make this concession by not taxing any part of the surplus which is allocated for that purpose.

5.39 p.m.

Mr. HORE-BELISHA: I gather that the case put forward by the hon. Member for St. Rollox (Mr. Leonard) who moved the Amendment is that, in the past, certain societies have made bad debts and have written them off and, instead of charging them against the profits of the year, have carried them to suspense accounts which are being gradually liquidated out of current profits. If I understood the hon. Gentleman aright, that was his case, and he desires that those past losses should be allowed as deductions in computing present Income Tax liability. The proposal, on the face of it, seems quite reasonable. Under the Income Tax law, losses are allowed to be carried forward in certain instances. The State can well afford to allow that, because it receives a tax upon the profits. Here, however, we are not looking into the past at all. The societies have paid
no tax on their profits in the past, and it would be quite impossible to examine the books of every society for an unlimited period or even for a limited period backwards in order to ascertain what society, if any, had a right to carry forward certain losses.
It would be an impossible proposal to carry into effect administratively. The hon. Gentleman is asking that we should apply proposals retroactively where they suit him but not where they suit us. In other words, we are not to get any Income Tax on profits which were made in the past, but we are to bear the brunt of the losses by allowing them to be carried forward. While I have every sympathy with what the hon. Gentleman has said, and do not in the least deny that certain societies have acted with great public spirit, he cannot expect a special provision to be put upon the Statute Book which would mulct the State in certain sums which might be due to it in the future, but which would give it no advantage in respect of profits made in the past.

5.42 p.m.

Mr. TINKER: Do I take it, from the reply of the Financial Secretary to the

Treasury, that in future this provision would be allowed by the Treasury, and that it would apply to co-operative societies as to any other societies. The hon. Member for Mansfield (Mr. C. Brown) referred to the mining areas. Suppose that in 1934 the miners are involved in another lock-out, that the same thing happens in the way of help given by co-operative societies and bad debts are created and that, owing to the unfortunate circumstances, redemption cannot be made. Do I take it that the Treasury will be prepared to meet us on the lines suggested in the Amendment? If the hon. Gentleman can come to that understanding, we might very well withdraw the Amendment.

Mr. HORE-BELISHA: Yes, Sir. The position in future will be exactly the same for co-operative societies as for incorporated companies, and it will be possible to carry forward losses on exactly the same principle.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 65; Noes, 263.

Division No. 229.]
AYES.
[5.44 p.m.


Adams, D. M. (Poplar, South)
George, Major G. Lloyd (Pembroke)
Mallalieu, Edward Lancelot


Attlee, Ciement Richard
Grenfell, David Rees (Glamorgan)
Mander, Geoffrey le M.


Sanfield, John William
Griffith, F. Kingeley (Middlesbro',W).
Mason, David M. (Edinburgh, E.)


Batey, Joseph
Grundy, Thomas W.
Owen, Major Goronwy


Bernays, Robert
Hamilton, Sir R. W.(Orkney & Zetl'nd)
Parkinson, John Allen


Bevan, Aneurin (Ebbw Vale)
Harris, Sir Percy
Pickering, Ernest H.


Brown, C. W. E. (Nottt., Manifield)
Hirst, George Henry
Price, Gabriel


Buchanan, George
Holdsworth, Herbert
Rea, Walter Russell


Cape, Thomas
Janner, Barnett
Roberts, Aled (Wrexham)


Cocks, Frederick Seymour
Jenkins, Sir William
Salter, Dr. Alfred


Cove, William G.
Johnstone, Harcourt (S. Shields)
Samuel, Rt. Hon. Sir H. (Darwen)


Cowan, D. M.
Jones, Henry Haydn (Merioneth)
Sinclair, Maj. Hi. Hn. Sir A. (C'thness)


Cripps, Sir Stafford
Jones, Morgan (Caerphilly)
Smith, Tom (Normanton)


Curry, A. C.
Kirkwood, David
Tinker, John Joseph


Daggar, George
Lansbury, Rt. Hon. George
White, Henry Graham


Davies, David L. (Pontypridd)
Lawson, John James
Williams, Edward John (Ogmore)


Davles, Rhys John (Westhoughton)
Leonard, William
Williams, Dr. John H. (Llanelly)


Dobble, William
Logan, David Gilbert
Williams, Thomas (York, Don Valley)


Edwards, Charles
Lunn, William
Wood, Sir Murdoch McKenzle (Banff)


Evans, David Owen (Cardigan)
McEntee, Valentine L.



Evans, R. T. (Carmarthen)
Maclay, Hon. Joseph Paton
TELLERS FOR THE AYES.—


Foot, Dingle (Dundee)
Maclean, Nell (Glasgow, Govan)
Mr. John and Mr. C. Macdonald.


Foot, Isaac (Cornwall, Bodmin)
Mainwaring, William Henry



NOES


Acland-Troyte, Lieut.-Colonel
Balley, Eric Alfred George
Bennett, Capt. Sir Ernest Nathaniel


Adams, Samuel Vyvyan T. (Leeds, W.)
Baldwin, Rt. Hon. Stanley
Birchall, Major Sir John Dearman


Albery, Irving James
Balniel, Lord
Borodale, Viscount


Allen, Sir J. Sandeman (Llverp'l, W.)
Banks, Sir Reginald Mitchell
Boulton, W, W.


Amery, Rt. Hon. Leopold C. M. S.
Barclay Harvey, C. M.
Bowyer, Capt. Sir George E. W.


Anstruthar-Gray, W. J.
Barrle, Sir Charles Coupar
Boyce, H. Leslle


Applin, Lieut.-Col. Reginald V. K.
Beauchamp, Sir Brograve Campbell
Bracken, Brendan


Apsley, Lord
Beaumont, M. W. (Bucks., Aylesbury)
Braithwaite, Maj. A. N. (Yorks, E.R.)


Astbury, Lieut-Com. Frederick Wolfe
Beaumont, Hon. R.E.B. (Portsm'th.c.)
Braithwaite, J. G. (Hillsborough)


Astor, Maj. Hn. John J. (Kent, Dover)
Belt, Sir Alfred L.
Briscoe, Capt. Richard George


Atholl, Duchess of
Benn, Sir Arthur Shirley
Broadbent, Colonel John


Brockiebank, C. E. R.
Hales, Harold K.
Percy, Lord Eustace


Brown, Col. D. C. (N'th'I'd., Hexham)
Hamilton, Sir George (Word)
Perkins, Walter R. D.


Brown, Brig.-Gen. H.C. (Berks., Newb'y)
Hammersley, Samuel S.
Petherick, M.


Browne, Captain A. C.
Hanbury, Cecil
Peto, Sir Basil E. (Devon, Barnstaple)


Buchan, John
Hanley, Dennis A.
Peto, Geoffrey K.(W'verh'pt'n, Bllst' n)


Buchan-Hepburn, P. G. T.
Hartington, Marquess of
Pickford, Hon. Mary Ada


Burgin, Dr. Edward Leslie
Hartland, George A.
Pike, Cecil F.


Burnett, John George
Haslam, Henry (Horncastle)
Power, Sir John Cecil


Cadogan, Hon. Edward
Headlam, Lieut.-Col. Cuthbert M.
Pownall, Sir Assheton


Campbell, Sir Edward Taswell (Brmly)
Hellgers, Captain F. F. A.
Ramsay, Alexander (W. Bromwich)


Caporn, Arthur Cecil
Henderson, Sir Vivian L. (Chelmsford)
Ramsay, Capt. A. H. M. (Midlothian)


Castlereagh, Viscount
Heneage, Lieut.-Colonel Arthur P.
Ramsay, T. B. W. (Western Isles)


Cayzer, Sir Charles (Chester, City)
Herbert, Capt. S. (Abbey Division)
Ramsbotham, Herwald


Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Hills, Major Rt. Hon. John Waller
Ramsden, Sir Eugene


Chamberlain, Rt. Hon. Sir J.A. (Blrm.,W)
Hope, Capt. Hon. A. O. J. (Aston)
Rawson, Sir Cooper


Chapman, Col. R. (Houghton-le-Spring)
Hope, Sydney (Chester, Stalybridge)
Reld, David D. (County Down)


Chapman, Sir Samuel (Edinburgh, S.)
Hore-Belisha, Leslie
Reld, William Allan (Derby)


Choriton, Alan Ernest Leofric
Hornby, Frank
Rhys, Hon. Charles Arthur U.


Christie, James Archibald
Horne, Rt. Hon. Sir Robert S
Roberts, Sir Samuel (Ecclesall)


Clarke, Frank
Horobin, Ian M.
Ropner, Colonel L.


Clarry, Reginald George
Horsbrugh, Florence
Rosbotnam, Sir Samuel


Clayton, Sir Christopher
Howitt, Dr. Alfred S.
Ross Taylor, Walter (Woodbridge)


Colville, Lieut.-Colonel J.
Hudson, Capt. A. U. M. (Hackney, N.)
Ruggles-Brise, Colonel E. A.


Conant, R. J. E.
Hudson, Robert Spear (Southport)
Runge, Norah Cecil


Cook, Thomas A.
Hume, Sir George Hopwood
Russell, Alexander West (Tynemouth)


Cooke, Douglas
Hunter-Weston, Lt.-Gen. Sir Aylmer
Russell, Hamer Field (Sheffield, B'tslde)


Cooper, A. Duff
Hurst, Sir Gerald B.
Rutherford, Sir John Hugo (Liverp'l)


Copeland, Ida
Jackson, Sir Henry (Wandsworth, C.)
Salt, Edward W.


Courthope, Colonel Sir George L.
Jamleson, Douglas
Samuel, Sir Arthur Michael (F'nham)


Craddock, Sir Reginald Henry
jesson, Major Thomas E.
Sandeman, Sir A. N. Stewart


Croft, Brigadier-General Sir H.
Joel, Dudley J. Barnato
Sanderson, Sir Frank Barnard


Crooke, J. Smedley
Johnston, J. W. (Clackmannan)
Shaw, Helen B. (Lanark, Bothwell)


Crookshtank, Col. C. de Windt (Bootle)
Ker, J. Campbell
Slater, John


Cross, R. H.
Kerr, Hamilton W.
Smiles, Liut.-Col. Sir Walter D.


Cruddas, Lieut.-Colonel Bernard
Kimball, Lawrence
Smith, Louis W. (Sheffield, Hallam)


Dalkeith, Earl of
Lamb, Sir Joseph Quinton
Smith, R. W. (Ab'rd'n & Kic'dlne, C.)


Davidson, Rt. Hon. J. C. C.
Law, Richard K. (Hull, S.W.)
Smith-Carington, Neville w.


Dawson, Sir Philip
Leech, Dr. J. W.
Smithers, Waldron


Denman, Hon. R. D.
Lees-Jones, John
Somervell, Donald Bradley


Despencer-Robertson, Major J. A. F.
Leighton, Major B. E. P.
Somerville, Annesley A. (Windsor)


Dixon, Rt. Hon. Herbert
Lewis, Oswald
Sotheron-Estcourt, Captain T. E.


Donner, P. W.
Llddall, Walter S.
Spears, Brigadier-General Edward L.


Doran, Edward
Lloyd, Geoffrey
Spencer, Captain Richard A.


Dower, Captain A. V. G.
Locker-Lampson, Rt. Hn. G. (Wd.Gr'n)
Spender-Clay, Rt. Hon. Herbert H.


Drewe, Cedric
Lockwood, John C. (Hackney, C.)
Stanley, Lord (Lancaster, Fyide)


Duckworth, George A. V.
Lumley, Captain Lawrence R.
Stanley, Hon. O. F. G. (Westmorland)


Duggan, Hubert John
Lyons, Abraham Montagu
Strickland, Captain W. F.


Eady, George H.
MacAndrew, Lt.-Col. C. G. (Partick)
Stuart, Lord C. Crichton-


Edmondson, Major A. J.
Mac Andrew, Capt. J. O. (Ayr)
Sueter, Rear-Admiral Murray F.


Ellis, Sir R. Geoffrey
McCorquodale, M. S.
Thompson, Luke


Elmley, Viscount
McKie, John Hamilton
Thorp, Linton Theodore


Emmott, Charles E. G. C.
Macmillan, Maurice Harold
Todd, A. L. S. (Kingswinford)


Emrys-Evans, P. V.
Macquisten, Frederick Alexander
Train, John


Erskine, Lord (Weston-super-Mare)
Maitland, Adam
Tryon, Rt. Hon. George Clement


Essenhigh, Reginald Clare
Manningham-Buller, Lt.-Col. Sir M.
Turton, Robert Hugh


Everard, W. Lindsay
Margesson, Capt. Rt. Hon. H. D. R.
Vaughan-Morgan, Sir Kenyon


Fielden, Edward Brockiehurst
Marsden, Commander Arthur
Wallace, Captain D. E. (Hornsey)


Ford, Sir Patrick J.
Mayhew, Lieut.-Colonel John
Ward, Irene Mary Bewick (Wallsend)


Forestler-Walker, Sir Leolln
Meller, Sir Richard James
Ward, Sarah Adelaide (Cannock)


Fox, Sir Gifford
Merriman, Sir F. Boyd
Wardlaw-Milne, Sir John S.


Fraser, Captain Ian
Mills, Sir Frederick (Leyton, E.)
Warrender, Sir Victor A. G.


Fuller, Captain A. G.
Mills, Major J. D. (New Forest)
Waterhouse, Captain Charles


Gauit, Lieut.-Col. A. Hamilton
Mitchell, Harold P.(Br'tfd & Chisw'k)
Watt, Captain George Steven H.


Gibson, Charles Granville
Mitchell, Sir W. Lane (Streatham)
Wayland, Sir William A.


Gillett, Sir George Masterman
Monsell, Rt. Hon. Sir B. Eyres
Wells, Sydney Richard


Gilmour, Lt.-Col. Rt. Hon. Sir John
Morgan, Robert H.
Weymouth, Viscount


Gluckstein, Louis Halle
Morris, John Patrick (Salford, N.)
Whyte, Jardine Bell


Goff, Sir Park
Morrison, William Shephard
Williams, Herbert G. (Croydon, S.)


Goodman, Colonel Albert W.
Munro, Patrick
Wills, Wilfrid D.


Gower, Sir Robert
Nation, Brigadier-General J. J. H.
Wilson, Lt.-Col. Sir Arnold (Hertf'd)


Graham, Sir F. Fergus (C'mb'rl'd, N.)
Newton, Sir Douglas George C.
Windsor, Clive, Lieut-Colonel George


Grattan-Doyle, Sir Nicholas
Normand, Wilfrid Guild
Womersley, Walter James


Greaves-Lord, Sir Walter
Nunn, William
Wood, Rt. Hon. Sir H. Kingstey


Gretton, Colonel Rt. Hon. John
O'Neill, Rt. Hon. Sir Hugh
Worthington, Dr. John V.


Grigg, Sir Edward
Ormsby-Gore, Rt. Hon. William G.A.



Grimston, R. V.
Patrick, Colin M.
TELLERS FOR THE NOES.—


Gunston, Captain D. W.
Peake, Captain Osbert
Lieut-Colonel Sir A. Lambert Ward


Hacking, Rt. Hon. Douglas H.
Peat, Charles U.
and Commander Southby.

5.54 p.m.

Mr. DAVID GRENFELL: I beg to move, in page 18, line 30, after the word "surplus," to insert the words:
(other than any profit or surplus allocated by a society towards the restoration of members' share capital to its par value).
I regret that I was not here when the last Amendment was being discussed, to join with my colleagues on these benches in their appreciation of the kindly spirit which is now beginning to manifest itself on the opposite side of the House. I hope that I shall say nothing which will detract from or diminish that kindly spirit, and that I may' be successful in eliciting a still warmer response to the request that I am now making. I believe that every Member of the House, if he were to adjudicate on his own initiative, without any party prejudice or sense of loyalty to the Chancellor of the Exchequer or the Financial Secretary, would be disposed to say that this is a reasonable Amendment which ought to be accepted.
We have no desire to add to the value of the shares held by any individual member, or to the total value of the shares held by societies. As the House knows, the shares of co-operative societies are held in values of £l, in small blocks, never exceeding £200 per shareholder, 200 £l shares being the maximum allowed to an individual shareholder in any society. In the co-operative movement the shares as a rule do not fluctuate; each share is a £l share, and there is no creation of fictitious value. The intention is to give to the shareholder the value of the investment he makes, and there is no attempt to traffic in shares or to exploit either the shareholder, the members in general, or the public who may be invited to acquire these shares. These £l shares are really the result of slender savings carried on over a long period under very great difficulty, and built up in some cases in very small amounts like Is. at a time. Hon. Members will know how the shillings are put one on the top of the other in the savings bank, and, when a sum of 20s. has been acquired, another share is allotted to the member. In that way the holdings mount up gradually, but, as I have said, an individual shareholder can never acquire a very large holding or take advantage of any speculation or traffic in the shares.
These £l shares are a most stable investment, and we find, generally speaking, that there is no necessity to ask for any assistance to maintain the value of the shares. But even co-operative societies are subject to the same strains
and stresses as contemporary institutions, and we find that, because of the condition of industry in the neighbourhood in which a society operates, or because of the difficulties of trade and commerce, which are sometimes responsible for a complete breakdown of the local industry, our societies do not always emerge unscathed from the industrial storm which surrounds them, and by which they are sometimes in danger of being overwhelmed. Occasionally there is damage, and the need for re-equipment and repair. This is taken in hand in the interests of the shareholders of the society which has become subject to loss in this way, and it is brought back to solvency by the assistance of a stronger society, which takes the weaker and damaged society under its wing and carries it forward again, or, to use a nautical simile, takes it in tow until the stormy weather has passed and it is safe in harbour again.
The stronger society usually takes over the smaller one and runs the business. In the meantime, in many cases, the value of the shares has run down, so that, if an attempt were made to realise them, they would not realise anything like their original value. The society which takes over the business and assists the original society sees that the business is well managed, and when local industries revive, purchasing power begins to expand, and business increases, the earnings of the society are directed to making the society solvent and restoring the value of its shares. But there is never, in these or any other circumstances, any attempt to raise the value of the shares above the original £l; societies are always satisfied to maintain the share capital at its par value.
In these cases, while some societies sacrifice a great deal in order to help other societies to regain their par value, they never attempt to boost the shares beyond the value of 20s. Sometimes it is the Go-operative Wholesale Society that takes over the care of the weaker society and assumes responsibility for its shares. Occasionally the restoration of value takes a considerable time. I know of several instances in which local societies have been damaged almost beyond any hope of redemption, indeed to such an extent that, if they were private companies, they would disappear in the Bankruptcy Court and would never
be heard of again. Because of the fortitude and wonderful capacity for mutuality posessed by our people, the societies are nursed to a solvent condition again. But no one has profited by this. The earnings of the society directed towards the restoration of the share value do not go into anyone's pocket. They simply make good that which has been lost in mutual trading and should, I believe, be regarded as much as the dividends as a proper subject for relief from taxation even under the present proposals of the Chancellor.
My hon. Friend the Member for Aberdare (Mr. G. Hall) called attention to a society in his own division where men and women 30 or 40 years ago had commenced in a small way to. supply themselves with commodities in a mining district, where there are no large establishments and where the variety of purchasable commodities is always very small. After many years of effort, and of considerable advantage to the community, the society fell upon evil days, not because of any mismanagement but because the depression which has so seriously damaged the mining industry and its workpeople equally damaged the institutions for which they are responsible. The society had to be taken over by a larger society. Those who put in 20s. and expected to find 20s. when they came to the end of their working days unhappily find that their expectations are not to be realised. I believe the Financial Secretary and the Chancellor of the Exchequer are sympathetic in a case of this kind, and, while I utterly fail to understand why they have chosen to launch what we regard as an attack upon the principle of mutuality and thrift, we think there is a special case and that it would be no variation even of the intentions of the Government if they meet it. I hope the Financial Secretary will give us a word of encouragement and show by a gesture that he is not deaf to the wishes and ambitions of modest people all over the country who are, after all, the salt of the earth and the very best people in our land. I hope he will give us the concession that we ask for.

6.5 p.m.

Mr. HORE-BELISHA: I thank the hon. Gentleman for referring to my kindly spirit, but that kindly spirit cannot
deflect me from my sense of justice. As I have said many times to-day, because I have been compelled to say it, our purpose is to treat co-operative societies and incorporated companies on exactly the same basis, and that we shall do. If I followed the hon. Gentleman correctly, the case that he was putting before the House was this. A society, which we will call Society "B," is in difficulties. Society "A" wishes to assist Society "B" and takes over its shares, nominally worth a sovereign, at 7s. In order that the shareholders in Society "B" may not suffer loss, Society "A" proceeds to accumulate a redemption fund out of its current profits for the purpose of increasing the 7s. which it has originally given up to a sovereign. Society "A," which has done this kindly, altruistic thing, is worthy of the very highest praise. Plainly, it did not do it for gain. It did it out of what I may term a co-operative spirit, but, if Society "A" wishes to utilise its profits for the purpose of assisting shareholders in Society "B," it must be borne in mind that it is utilising its profits. It is not utilising sums incurred in making those profits. All that you can set off for Income Tax purposes are sums which you have incurred in making your profits.

Mr. GRENFELL: I do not wish that any investment should be allocated for this purpose. I want the earnings of Society "B" to be allowed to remain for the benefit of the shareholders of Society "B."

Mr. HORE-BELISHA: I am not sure that I clearly follow what the hon. Gentleman now says, but I thought I followed him originally, and I thought I was carrying him with me when I described step by step the benevolent action of Society "A" towards Society "B." I understood him to wish that Society "A," in making up the value of the shares in Society "B" from 7s. to £l, should be allowed to treat the expenditure so involved as an expense against Income Tax though it is the utilisation of profits.
Let us look at the matter from another angle. An ordinary trading company can increase its share capital, but it does so out of its profits, and those profits are assessable to tax. Suppose it wishes to give its shareholder a bonus of 10s. It
gives that bonus out of profits which are liable to tax. If one applies this analogy in the case of a co-operative society, one sees that what the society is doing is giving a bonus to the shareholders of Society "B." We cannot depart from ordinary Income Tax principles. We wish to avoid any charge of discrimination or unfairness being brought against us by putting the co-operative society on exactly the same footing as the ordinary trading company. I am sorry not to be able to do what the hon. Gentleman desires, but

what he desires is to place the co-operative society in this respect in a privileged position. I have admitted that the activities of Society "A" as he described them, were magnanimous, but, nevertheless, though Society "A" can utilise its profits in whatever way it desires, you cannot get rid of the fact that they are profits.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 72; Noes, 240.

Division No. 230.]
AYES.
[6.13 p.m.


Adams, D. M. (Poplar, South)
Graham, D. M. (Lanark, Hamilton)
Mander, Geoffrey le M.


Aske, Sir Robert William
Grenfell, David Rees (Glamorgan)
Mason, David M. (Edinburgh, E.)


Attlee, Clement Richard
Griffith, F. Kingsley (Middlesbro',W.)
Maxton, James


Banfield, John William
Griffiths, T. (Monmouth, Pontypool)
Owen, Major Goronwy


Batty, Joseph
Grundy, Thomas W.
Parkinson, John Allen


Bernays, Robert
Hamilton, Sir R. W.(Orkney & Zetl'nd)
Pickering, Ernest H.


Bevan, Aneurin (Ebbw Vale)
Harris, Sir Percy
Price, Gabriel


Brown, C. W. E. (Notts., Mansfield)
Hirst, George Henry
Rea, Walter Russell


Buchanan, George
Holdsworth, Herbert
Roberts, Aled (Wrexham)


Cape, Thomas
Janner, Barnett
Salter, Dr. Alfred


Cocks, Frederick Seymour
Jenkins, Sir William
Samuel, Rt. Hon. Sir H. (Darwen)


Cove, William G.
Johnstone, Harcourt (S. Shields)
Shaw, Captain William T. (Forfar)


Cripps, Sir Stafford
Jones, Henry Haydn (Merioneth)
Sinclair, Maj. Rt. Hn. Sir A. (C'thness)


Curry, A. C.
Jones, Morgan (Caerphilly)
Smith, Tom (Normanton)


Daggar, George
Kirkwood, David
Tinker, John Joseph


Davies, David L. (Pontypridd)
Lansbury, Rt. Hon. George
Wallace, John (Dunfermline)


Davies, Rhys John (Westhoughton)
Lawson, John James
Wedgwood, Rt. Hon. Joslah


Dobble, William
Leonard, William
White, Henry Graham


Edwards, Charles
Logan, David Gilbert
Williams, Edward John (Ogmore)


Evans, David Owen (Cardigan)
Lunn, William
Williams, Dr. John H. (Lianelly)


Evans, R. T. (Carmarthen)
M c Entee, Valentine L.
Williams, Thomas (York., Don Valley)


Foot, Dingle (Dundee)
Maclay, Hon. Joseph Paton
Wood, Sir Murdoch McKenzie (Banff)


Foot. Isaac (Cornwall, Bodmin)
Maclean, Nell (Glasgow, Govan)



George, Major G. Lloyd (Pembroke)
Mainwaring, William Henry
TELLERS FOR THE AYES.—


George, Megan A. Lloyd (Anglesea)
Mallalieu, Edward Lancelot
Mr. John and Mr. G. Macdonald.


NOES.


Acland-Troyte, Lieut.-Colonel
Cadogan, Hon. Edward
Doran, Edward


Adams, Samuel Vyvyan T. (Leeds, W.)
Campbell, Sir Edward Taswell (Brmiy)
Dower, Captain A. V. G.


Altchison, Rt. Hon. Craigle M.
Caporn, Arthur Cecil
Drewe, Cedric


Albery, Irving James
Carver, Major William H.
Duckworth, George A. V.


Anstruther-Gray, W. J.
Castiereagh, Viscount
Duggan, Hubert John


Applin, Lieut.-Col. Reginald V. K.
Cayzer, Sir Charles (Chester, City)
Eady, George H.


Astor, Maj. Hn. John J. (Kent, Dover)
Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Edmondson, Major A. J.


Atholl, Duchess of
Chamberlain, Rt. Hon. Sir J.A. (Birm.,W)
Ellis, Sir R. Geoffrey


Bailey, Erie Alfred George
Chapman, Col. R.(Houghton-le-Spring).
Eimlsy, Viscount


Baldwin, Rt. Hon. Stanley
Chapman, Sir Samuel (Edlnburgh,S.)
Emrys-Evans, P. V.


Balfour, Capt. Harold (I. of Thanet)
Christie, James Archibald
Erskine, Lord (Weston-super-Mare)


Bainlel, Lord
Clarke, Frank
Essenhigh, Reginald Clara


Banks, Sir Reginald Mitchell
Clarry, Reginald George
Everard, W. Lindsay


Barclay-Harvey, C M.
Clayton, Sir Christopher
Fielden, Edward Brockiehurst


Barrle, Sir Charles Coupar
Cobb, Sir Cyril
Ford, Sir Patrick J.


Beauchamp, Sir Brograve Campbell
Conant, R. J. E.
Forestler-Walker, Sir Leolln


Beaumont, Hon. R.E.B. (Portsm'th.C.)
Cook, Thomas A.
Fox, Sir Glfford


Belt, Sir Alfred L.
Cooke, Douglas
Fraser, Captain Ian


Bennett, Capt. Sir Ernest Nathaniel
Cooper, A. Duff
Fuller, Captain A. G.


Birchall, Major Sir John Dearman
Copeland, Ida
Gautt, Lieut.-Col. A. Hamilton


Blindell, James
Courthope, Colonel Sir George L.
Gibson, Charles Granville


Borodale, Viscount
Cowan, D. M.
Gillett, Sir George Masterman


Boulton, W. W,
Craddock, Sir Reginald Henry
Gluckstein, Louis Halle


Bowyer, Capt. Sir George E. W.
Cranborne, Viscount
Goff, Sir Park


Boyce, H. Leslle
Crooke, J. Smedley
Goodman, Colonel Albert W


Braithwalte, J. G. (Hillsborough)
Crookshank, Col. C. de windt (Bootle)
Gower, Sir Robert


Broadbent, Colonel John
Cross, R. H.
Graham, Sir F. Fergus (C'mb'rl'd, N.)


Brocklebank, C. E. R.
Dalkeith, Earl of
Grattan-Doyle, Sir Nicholas


Brown, Col. D. C. (N'thTd, Hexham)
Davidson, Rt. Hon. J. C. C.
Greaves-Lord, Sir Walter


Brown, Brig.-Gen. H.C. (Berks., Newb'y)
Dawson, Sir Philip
Gretton, Colonel Rt. Hon. John


Browns, Captain A. C.
Denman, Hon. R. D.
Grimston, R. V.


Buchan, John
Despencer-Robertson, Major J. A. F.
Gunston, Captain D, W.


Buchan-Hepburn, P. G. T,
Dixon, Rt. Hon. Herbert
Hacking, Rt. Hon. Douglas H.


Burnett, John George
Donner, P. W,
Hales, Harold K.


Hammersley, Samuel S.
Mayhew, Lieut.-Colonel John
Salt, Edward W.


Hanbury, Cecil
Merriman, Sir F. Boyd
Samuel, Sir Arthur Michael (F'nham)


Haniy, Dennis A.
Mills, Sir Frederick (Leyton, E.)
Sandeman, Sir A. N. Stewart


Harbord, Arthur
Mills, Major J. D. (New Forest)
Sanderson, Sir Frank Barnard


Hartland, George A.
Mitchell, Harold P.(Br'tt'd & Chisw'k)
Shaw, Helen B. (Lanark, Bothwell)


Haslam, Henry (Horncastle)
Mitchell, Sir W. Lane (Streatham)
Slater, John


Headlam, Lieut.-Col. Cuthbert M.
Molson, A. Hugh Eisdale
Smith, Louie W. (Sheffield, Hallam)


Hellgers, Captain F. F. A.
Monsell, Rt. Hon. Sir B. Eyree
Smith, R. W. (Ab'rd'n & Kinc'dine, C.)


Henderson, Sir Vivlan L. (Cheimsford)
Morgan, Robert H.
Smith-Carington, Neville W.


Hope, Capt. Hon. A. O. J. (Aston)
Morris, John Patrick (Salford, N.)
Smithers, Waldron


Hope, Sydney (Chester, Stalybridge)
Morris-Jones, Dr. J. H. (Denbigh)
Somervell, Donald Bradley


Hore-Belisha, Lesiie
Morrison, William Shepherd
Somerville, Annesley A. (Windsor)


Hornby, Frank
Munro, Patrick
Sotheron-Estcourt, Captain T. E.


Horne, Rt. Hon. Sir Robert S.
Nation, Brigadier-General J. J. H.
Southby, Commander Archibald R. J.


Horobin, Ian M.
Newton, Sir Douglas George C.
Spears, Brigadier-General Edward L.


Horsbrugh, Florence
Normand, Wilfrid Guild
Spencer, Captain Richard A.


Hudson, Capt. A. U. M. (Hackney,N.)
O'Neill, Rt. Hon. Sir Hugh
Spender-Clay, Rt. Hon. Herbert H.


Hume, Sir George Hopwood
Ormsby-Gore, Rt. Hon. William G. A.
Stanley, Lord (Lancaster, Fylde)


Hunter-Weston, Lt.-Gen. Sir Aylmer
Patrick, Colin M.
Stanley, Hon. O. F. G. (Westmorland)


Jackson, Sir Henry (Wandsworth, C.)
Peake, Captain Osbert
Strauss, Edward A.


Jamleson, Douglas
Percy, Lord Eustace
Strickland, Captain W. F.


Jesson, Major Thomas E.
Petherick, M.
Stuart, Lord C. Crichton-


Joel, Dudley J. Barnato
Peto, Sir Basil E. (Devon, Barnstaple)
Sugden, Sir Wilfrid Hart


Johnston, J. W. (Clackmannan)
Peto, Geoffrey K.(W'verh'pt'n, Bilston)
Thomson, Sir Frederick Charles


Jones, Lewis (Swansea, West)
Pike, Cecil F.
Thorp, Linton Theodore


Ker, J. Campbell
Power, Sir John Cecil
Todd, A. L. S. (Kingswinford)


Kerr, Hamilton W.
Pownall, Sir Assheton
Train, John


Kimball, Lawrence
Raikes, Henry V. A. M.
Tryon, Rt. Hon. George Clement


Lamb, Sir Joseph Quinton
Ramsay, Alexander (W. Bromwich)
Turton, Robert Hugh


Law, Richard K. (Hull, S.W.)
Ramsay, Capt. A.H. M. (Midlothian)
Vaughan-Morgan, Sir Kenyon


Leech, Dr. J. W.
Ramsay, T. B. W. (Western Isles)
Wallace, Captain D. E. (Hornsey)


Leighton, Major B. E. P.
Ramsden, Sir Eugene
Ward, Lt.-Col. Sir A. L. (Hull)


Lennox-Boyd, A. T.
Rawson, Sir Cooper
Ward, Sarah Adelaide (Cannock)


Lewis, Oswald
Reld, David D. (County Down)
Wardlaw-Milne, Sir John S.


Liddall, Walter S.
Reld, William Allan (Derby)
Warrender, Sir Victor A. G.


Lloyd, Geoffrey
Rhys, Hon. Charles Arthur U.
Waterhouse, Captain Charles


Lockwood, John C. (Hackney, C.)
Roberts, Sir Samuel (Ecclesall)
Wells, Sydney Richard


Lumley, Captain Lawrence R.
Ropner, Colonel L.
Weymouth, Viscount


Lyons, Abraham Montagu
Rosbotham, Sir Samuel
Whyte, Jardine Bell


McCorquodale, M. S.
Ross Taylor, Walter (Woodbridge)
Williams, Herbert G. (Croydon, S.)


McKie, John Hamilton
Ruggles-Brise, Colonel E. A.
Wills, Willfrid D.


Macmillan, Maurice Harold
Runge, Norah Cecil
Wilson, Lt.-Col. Sir Arnold (Hertf'd)


Macquisten, Frederick Alexander
Russell, Alexander West (Tynemouth)
Windsor-Clive, Lieut.-Colonel George


Manningham-Buller, Lt.-Col. Sir M.
Russell, Hamer Field (Sheffield, B'tslde)
Wood, Rt. Hon. Sir H. Kingsley


Margesson, Capt. Rt. Hon. H. D. R.
Russell, R. J. (Eddlsbury)



Marsden, Commander Arthur
Rutherford, Sir John Hugo (Llverp'l)
TELLERS FOR THE NOES.—


Mason, Col. Glyn K. (Croydon, N.)
Salmon, Sir Isldore
Sir George Penny and Mr.




Womersley.

Mr. SPEAKER: I do not select the next two Amendments, that in the name of the hon. Member for Govan (Mr. Maclean)—in page 18, line 30, after the word "surplus," to insert the words,
(other than any profit or surplus allocated by a society for promoting the health and social welfare of its members).
—and that in the name of the hon. Member for Gower (Mr. D. Grenfell)—in page 18, line 38, at the end, to insert the words:
Provided that in the case of registered societies the charge to tax in respect of such profits or surplus shall not exceed one-eighth of the standard rate.
The next Amendment on the Paper in the name of the hon. Member for Roth-well (Mr. Lunn)—in page 18, line 38, at the end, to insert the words:
Provided that for the year 1933–34 allowances for depreciation in respect of any society shall be based upon the provisions for depreciation laid down in any rules of the society in force on the first day of April, nineteen hundred and thirty-three.
—is not in order, because it might entail a charge.

Mr. LEONARD: This Amendment is of immense importance in view of the number of people involved. Co-operative societies are, as you are aware, Mr. Speaker, tied by rules to depreciation and they have no alternative but to apply the rules of 1932, and the assessment for the year 1933–34 will be based upon those rules. They will have no opportunity of modifying them to meet the changed circumstances, and I ask whether it is not possible to have the matter taken?

Mr. SPEAKER: No. I am afraid that I cannot take the Amendment, because it clearly would be out of order. In considering these questions I do not have only to consider whether the effect of some Amendment will necessarily be that a higher rate of taxation is imposed than if the Bill was left as it was originally. I have to think whether it might possibly in any circumstances have that
effect, and I came to the conclusion, after studying the Amendment, that in this case it might have that effect. It is possible that in some cases the rules of the society as to allowances for depreciation would prove more onerous than the ordinary provision of the Income Tax Acts, and, if so, the Amendment would result in the society having to pay more tax than it would have to pay under the Clause as it stands at present.

Mr. LEONARD: Thank you very much. I appreciate the position.

6.23 p.m.

Mr. CHARLES BROWN: I beg to move, in page 19, line 17, at the end, to insert the words:
and where any sum which has been assessed for tax in accordance with the provisions of this section is subsequently granted by the company or society to members or other persons as a discount, rebate, dividend, or bonus within the meaning of this Sub-section, the company or society shall be entitled to a refund of any tax which may have been paid thereon.
It is obvious that under the Clause sums put to reserve will be depleted by the amount of the tax which will have to be paid. If at some future time it becomes necessary to withdraw funds from the taxed reserve fund in order to maintain dividend on purchases which is not taxable, it is reasonable to ask that the tax upon the amount withdrawn for the purpose shall be refunded in order to replace into the reserve fund the amount of tax by which it has been depleted. From the arguments which have been advanced in connection with this tax from stage to stage by the Chancellor of the Exchequer and by the Financial Secretary to the Treasury, there is no intention, we are assured, on the part of the Government to tax what is usually called "divi," and obviously it must follow from that that there can be no intention on the part of the Government to tax any moneys used in any circumstances for the payment of dividend. Consequently I feel encouraged in bringing forward the Amendment. At any rate, I hope that the Financial Secretary to the Treasury will tell us that this is the one Amendment which at least can be accepted.
We are simply seeking to ensure by the Amendment that the amounts which are actually used for the purposes of paying dividend on purchases, whether they come
out of the current year's surplus or out of the previous year's reserves, shall not be subject to tax. It will be extremely interesting to see how the Financial Secretary to the Treasury gets out of what I consider to be a dilemma if he does not accept the Amendment. The Government have repeatedly assured the House that in no circumstances do they wish to tax "divi." Therefore, if in any one year certain moneys are put aside into a fund which in a subsequent year have to be taken out solely for the purpose of paying "divi", we are entitled to ask that on such sums a rebate should be granted. I am encouraged to hope that, at any rate, in connection with the Amendment the Financial Secretary to the Treasury will tell us that he will make this one concession. It will be the only concession the Government have made, if they make it, in regard to the co-operative tax, and I very much hope that the hon. Gentleman will announce a concession on this occasion.

Mr. LEONARD: I beg to second the Amendment.

6.27 p.m.

Mr. HORE-BELISHA: We allowed the "divi" to be treated as a trade expense. That is clear. If money is put to reserve it pays the tax. The hon. Gentleman who moved the Amendment wants this position to arise. If they take the money out of reserve at a subsequent period they shall get back the tax. But we allow the same sum of money in effect by allowing the money to be treated as a trade expense. If it be taken out of the reserve and used to pay "divi", we treat it as a trade expense. The effect of the proposal of the hon. Gentleman would be that, not only would the Inland Revenue have to pay back the Income Tax or allow the Income Tax on it, but also to treat it as a trade expense. Therefore, the society, far from being taxed, would be making a profit. It is a very calm request, and I can hardly think that the hon. Gentleman was serious when he argued that the tax should be recouped and the same sum of money allowed again as a trade expense.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 67; Noes 240.

Division No. 231.]
AYES.
[6.29 p.m.


Adams, D. M. (Poplar, South)
George, Major G. Lloyd (Pembroke)
Mainwaring, William Henry


Aske, Sir Robert William
George, Megan A. Lloyd (Anglesea)
Mallalieu, Edward Lancelot


Attlee, Clement Richard
Graham, D. M. (Lanark, Hamilton)
Mander, Geoffrey le M.


Banfield, John William
Greenwood, Rt. Hon. Arthur
Maxton, James


Batey, Joseph
Grenfell, David Rees (Glamorgan)
Owen, Major Goronwy


Bernays, Robert
Griffith, F. Kingsley (Middlesbro'.W.)
Parkinson, John Allen


Sevan, Aneurin (Ebbw Vale)
Griffiths, T. (Monmouth, Pontypool)
Pickering, Ernest H.


Brown, C. W. E. (Notts., Mansfield)
Grundy, Thomas W.
Price, Gabriel


Buchanan, George
Hamilton, Sir R. W.(Orkney & Zetl'nd)
Rea, Walter Russell


Cape, Thomas
Harris, Sir Percy
Roberts, Aled (Wrexham)


Cove, William G.
Hirst, George Henry
Salter, Dr. Alfred


Cowan, D. M.
Holdsworth, Herbert
Samuel, Rt. Hon. Sir H. (Darwen)


Cripps, Sir Stafford
Janner, Barnett
Sinclair, Maj. Rt. Hn. Sir A. (C'thness)


Curry, A. C.
Jenkins, Sir William
Smith, Tom (Normanton)


Daggar, George
Jones, Henry Haydn (Merioneth)
Tinker, John Joseph


Davies, David L. (Pontypridd)
Jones, Morgan (Caerphilly)
Wedgwood, Rt. Hon. Josiah


Davies, Rhys John (Westhoughton)
Kirkwood, David
White, Henry Graham


Dobble, William
Lansbury, Rt. Hon. George
Williams, Edward John (Ogmore)


Edwards, Charles
Lawson, John James
Williams, Dr. John H. (Lianelly)


Evans, David Owen (Cardigan)
Leonard, William
Williams. Thomas (York, Don Valley)


Evans, R. T. (Carmarthen)
Lunn, William
Wood, Sir Murdoch McKenzie (Banff)


Foot, Dingle (Dundee)
McEntee, Valentine L.



Foot, Isaac (Cornwall, Bodmin)
Maclean, Nell (Glasgow, Govan)
TELLERS FOR THE AYES.—




Mr. John and Mr. G. Macdonald




NOES.


Acland-Troyte, Lieut.-Colonel
Craddock, Sir Reginald Henry
Hornby, Frank


Adams, Samuel Vyvyan T. (Leeds, W.)
Cranborne, Viscount
Home, Rt. Hon. Sir Robert S.


Albery, Irving James
Crooke, J. Smedley
Horobin, Ian M.


Anstruther-Gray, W. J.
Crookshank, Col. C. de Windt (Bootle)
Horsbrugh, Florence


Astor, Maj. Hn. John J. (Kent, Dover)
Cross, R. H.
Hudson, Capt. A. U. M. (Hackney, N.)


Atholl, Duchess of
Dalkeith, Earl of
Jackson, Sir Henry (Wandsworth, C.)


Bailey, Eric Alfred George
Davidson, Rt. Hon. J. C. C.
Jamieson, Douglas


Baldwin, Rt. Hon. Stanley
Dawson, Sir Philip
Jesson, Major Thomas E.


Balfour, George (Hampstead)
Denman, Hon. R. D.
Joel, Dudley J. Barnato


Balfour, Capt. Harold (I. of Thanet)
Despencer-Robertson, Major J. A. F.
Johnston, J. W. (Clackmannan)


Balniel, Lord
Dixon, Rt. Hon. Herbert
Jones, Lewis (Swansea, West)


Banks, Sir Reginald Mitchell
Donner, P. W.
Ker, J. Campbell


Barclay-Harvey, C, M.
Doran, Edward
Kerr, Hamilton W.


Beauchamp, Sir Brograve Campbell
Drewe, Cedric
Kimball, Lawrence


Beaumont, Hon. R.E.B. (Portsm'th.C.)
Duckworth, George A. V.
Knox, Sir Alfred


Beit, Sir Alfred L.
Duggan, Hubert John
Lamb, Sir Joseph Quinton


Bennett, Capt. Sir Ernest Nathaniel
Eady, George H.
Law, Richard K. (Hull, S.W.)


Birchall, Major Sir John Dearman
Edmondson, Major A. J.
Leech, Dr. J. W.


Bird, Ernest Roy (Yorks., Skipton)
Ellis, Sir R. Geoffrey
Leighton, Major B. E. P.


Blindell, James
Eimley, Viscount
Lewis, Oswald


Borodale, Viscount
Emrys-Evans, P. V.
Liddall, Walter S.


Boulton, W. W.
Erskine, Lord (Weston-super-Mare)
Lloyd, Geoffrey


Bowyer, Capt. Sir George E. W.
Essenhigh, Reginald Clare
Lockwood, John C. (Hackney, C.)


Boyce, H. Leslie
Everard, W. Lindsay
Lumley, Captain Lawrence R.


Braithwaite, J. G. (Hillsborough)
Fielden, Edward Brockiehurst
Lyons, Abraham Montagu


Broadbent, Colonel John
Ford, Sir Patrick J.
McCorquodale, M. S.


Brocklebank, C. E. R.
Forcstler-Walker, Sir Leolln
McKie, John Hamilton


Brown, Col. D. C. (N'th'l'd., Hexham)
Fox, Sir Gifford
Macmillan, Maurice Harold


Brown, Brig.-Gen. H.C.(Berks.,Newb'y)
Fraser, Captain Ian
Macquisten, Frederick Alexander


Browne, Captain A. C.
Fuller, Captain A. G.
Manningham-Buller, Lt.-Col. Sir M.


Buchan, John
Ganzonl, Sir John
Margesson, Capt. Rt. Hon. H. D. R.


Buchan-Hepburn, P. G. T.
Gibson, Charles Granville
Marsden, Commander Arthur


Burghley, Lord
Gillett, Sir George Masterman
Mason, Col. Glyn K. (Croydon, N.)


Burnett, John George
Gluckstein, Louis Halle
Mayhew, Lieut.-Colonel John


Cadogan, Hon. Edward
Goff, Sir Park
Merriman, Sir F. Boyd


Campbell, Sir Edward Taswell (Brmly)
Goodman, Colonel Albert W.
Mills, Sir Frederick (Leyton, E.)


Caporn, Arthur Cecil
Gower, Sir Robert
Mills, Major J. D. (New Forest)


Carver, Major William H.
Graham, Sir F. Fergus (C'mb'rl'd, N.)
Mitchell, Harold P.(Br'tf'd & Chlsw'k)


Castlereagh, Viscount
Grattan-Doyle, Sir Nicholas
Mitchell, Sir W. Lane (Streatham)


Cayzer, Sir Charles (Chester, City)
Greaves-Lord, Sir Walter
Molson, A. Hugh Elsdale


Cayzer, Maj. Sir H. R. (Prtsmth., S.)
Gretton, Colonel Rt. Hon. John
Monsell, Rt. Hon. Sir B. Eyres


Chamberlain, Rt. Hn. Sir J.A. (Blrm.,W.)
Grimston, R. V.
Morgan, Robert H.


Chapman, Col. R.(Houghton-le-Spring)
Gunston, Captain D. W.
Morrison, William Shephard


Chapman, Sir Samuel (Edinburgh, S.)
Hacking, Rt. Hon. Douglas H.
Munro, Patrick


Christie, James Archibald
Hales, Harold K.
Nail, Sir Joseph


Churchill, Rt. Hon. Winston Spencer
Hanbury, Cecil
Nation, Brigadier-General J. J. H.


Clarke, Frank
Hanley, Dennis A.
Newton, Sir Douglas George C.


Clayton, Sir Christopher
Harbord, Arthur
Normand, Wilfrid Guild


Clydesdale, Marquess of
Hartington, Marquess of
O'Neill, Rt. Hon. Sir Hugh


Cobb, Sir Cyril
Hartland, George A.
Ormsby-Gore, Rt. Hon. William G.A.


Conant, R. J. E.
Haslam, Henry (Horncastle)
Patrick, Colin M.


Cook, Thomas A.
Hellgers, Captain F. F. A.
Peake, Captain Osbert


Cooke, Douglas
Henderson, Sir Vivian L. (Chelmsf'd)
Penny, Sir George


Cooper, A. Duff
Hope,. Capt. Hon. A. O. J. (Aston)
Percy, Lord Eustace


Copeland, Ida
Hope, Sydney (Chester, Stalybridge)
Petherick, M.


Courthope, Colonel Sir George L.
Hore-Bellsha, Leslie
Peto, Sir Basil E. (Devon, Barnstaple)




Peto, Geoffrey K. (W'verh'pt'n, Bllst'n)
Samuel, Samuel (W'dsworth, Putney)
Sugden, Sir Wilfrid Hart


Pike, Cecil F,
Sandeman, Sir A. N. Stewart
Thompson, Luke


Power, Sir John Cecil
Sanderson, sir Frank Barnard
Thomson, Sir Frederick Charles


Pownall, Sir Assheton
Shaw, Helen B. (Lanark, Bothwell)
Thorp, Linton Theodore


Raikes, Henry V. A. M.
Slater, John
Todd, A. L. S. (Kingswinford)


Ramsay, Capt. A. H. M. (Midlothian)
Smiles, Lieut.-Col. Sir Walter D.
Train, John


Ramsay, T. a. W. (Western Isles)
Smith, Louis W. (Sheffield, Hallam)
Tryon, Rt. Hon. George Clement


Ramsden, Sir Eugene
Smith, R. w. (Aberd'n & Kinc'dine, C.)
Turton, Robert Hugh


Rawson, Sir Cooper
Smith-Carington, Neville W.
Vaughan-Morgan, Sir Kenyon


Reld, David D. (County Down)
Smithers, Waldron
Wallace, Captain D. E. (Hornsey)


Reld, William Allan (Derby)
Somervell, Donald Bradley
Ward, Lt.-Col. Sir A. L. (Hull)


Rhys, Hon. Charles Arthur U,
Somerville, Annesley A. (Windsor)
Ward, Sarah Adelaide (Cannock)


Roberts, Sir Samuel (Ecclesall)
Somerville, D, G. (Willesden, East)
Warrender, Sir Victor A. G.


Ropner, Colonel L.
Sotheron-Estcourt, Captain T. E.
Waterhouse, Captain Charles


Rosbotham, Sir Samuel
Southby, Commander Archibald R. J,
Wells, Sydney Richard


Ross Taylor, Walter (Woodbridge)
Spears, Brigadler-General Edward L
Weymouth, Viscount


Ruggles-Brise, Colonel E. A.
Spencer, Captain Richard A.
Whyte, Jardine Bell


Runge, Norah Cecil
Spender-Clay, Rt. Hon. Herbert H.
Williams, Herbert G. (Croydon, S.)


Russell, Alexander West (Tynemouth)
Stanley, Lord (Lancaster, Fylde)
Wills, Wilfrid D.


Russell, Hamer Field (Sheffield,B'tslde)
Stanley, Hon. O. F. C. (Westmorland)
Wilson, Lt.-Col. Sir Arnold (Hertf'd)


Russell, R. J. (Eddisbury)
Steel-Maitland, Rt. Hon. Sir Arthur
Windsor-Clive, Lieut.-Colonel George


Rutherford, Sir John Hugo (Liverp'l)
Strauss, Edward A.
Wood, Rt. Hon. Sir H. Kingsley


Salmon, sir Isldore
Strickland, Captain W. F.



Salt, Edward W.
Stuart, Hon. 1. (Moray and Nairn)
TELLERS FOR THE NOES—


Samuel, Sir Arthur Michael (F'nham)
Stuart, Lord C. Crichton-
Mr. Womersley and Dr. Morlis Jones.

CLAUSE 33.—(Establishment and applica tion of Post Office Fund.)

6.37 p.m.

Mr. ATTLEE: I beg to move to leave out the Clause.
Before we leave the Post Office Clauses, I should like to submit one or two points to the Postmaster-General. At an earlier stage we welcomed this Clause as the first instalment of a reform which has been long overdue, but we think that there is a great danger of the fixed contribution being found to be too high. The second point is that this is only an experiment for three years. The essential point about a reform in the financial position of the Post Office is that there should be finality, and until we get a final settlement between the Exchequer and the Post Office we shall not see that full development for which we all hope. We cannot expect the results which the Bridgeman Committee anticipated from this reform as long as it is merely temporary.
Let me put one or two specific points to the Postmaster-General. The first is with regard to Sub-section (4). The Post Office Fund may be used for the development of postal telegraphs and telephones, and sometimes as appropriations-in-aid of moneys provided by Parliament for salaries and expenses of the Post Office. I should like to ask whether it cannot be used for the benefit of depositors in the Post Office Savings Bank. At the present time these depositors are taxed, one cannot say exactly the sum, because part of the sum handed over is paid for services rendered, but we may reckon that something like £2,000,000 is taken from
the large number of small depositors in the Post Office. There is a case for redressing the grievance of the small depositors. It is not only one of justice, but of expediency, because there is no doubt that some of the other banks are cutting into the Post Office Savings Bank to a certain extent, and Post Office savings are a useful sum from the point of view of those who manage the National Debt. It is to their interests to keep the conditions as good as possible for the small investor. I should like to know whether, under the scheme, the surplus can be used for the benefit of the Post Office Savings Bank.
I am going again to make the point that the conditions of the staff should be amended out of the extra amount which is to be allowed to the Post Office. The Postmaster-General has pointed out that Post Office wages are dependent on various agreements made by the Whitley Council and so forth, but he will be the first to recognise that there is a strong case for the lower-paid postal servants and also for some temporary servants. Further, I hope that in the new circumstances the kind of parallel which is drawn between Post Office servants and workers in other Government Departments will not be drawn quite so strictly. They are not in all cases applicable. While I agree that the wages of civil servants should not depend on the profits made by the Department, on the other hand, the conditions of service in the Post Office cannot really be said to be equal to those of civil servants in other Departments, and I put in a plea also for staff amenities.
The next point is with regard to Subsection (7). On the Committee stage we had considerable discussions as to the importance of this House keeping control. The hon. Member for Farnham (Sir A. M. Samuel) was eloquent on the point. In setting up any fund of this kind, it is the duty of the House to see that it is properly safeguarded. The National Government are, or were, very anxious about the proper safeguarding of the sums paid by small depositors into the Savings Bank, although we have heard nothing since the General Election, but we know that the people were then told that these investments were in danger—

Mr. SLATER: They were.

Mr. ATTLEE: The hon. Member will no doubt support me in asking the Postmaster-General whether there is any danger in handing over the funds of the Savings Bank to a body presided over by the Chancellor of the Exchequer? Is it right that the money in the Post Office Fund should be handed over to the very people who are not trusted by the hon. Member below the Gangway? And there is this further point. I understood that the Chancellor of the Exchequer of that day was a purist in financial matters and a strong anti-gambler, whereas the present Chancellor of the Exchequer is now engaged in the very delicate and difficult matter of gambling in the exchanges. I do not know how far the sums handed over to the National Debt Commissioners from the Savings Bank funds are or may be utilised in that way, but it would be awkward if the Postmaster-General, having handed over a considerable sum to the custody of the National Debt Commissioners, found when he wanted that money that they had lost it in a gamble on the franc, or on the rupee or any of the other exchanges.
I am a child in these matters, but we have had the privilege in this House of hearing expert advice on this matter from one who appears to treat millions as we, would treat sixpences, namely, the hon. Member for Putney (Mr. S. Samuel). He said that there were a few small gamblers in exchanges to the extent of £4,000,000 or £5,000,000 or so, and he spoke in this connection about a
little paltry sum of £150,000,000. But I gathered that he was rather disturbed about the Exchange Equalisation Fund, and I think it was he who suggested that in these exchange operations you can show a profit all the time on paper, but if ever a time comes when you have to unload, you may find yourself in difficulty. The Postmaster-General is the trustee of these Post Office Savings Bank funds, although he has to submit to Exchequer control, and I am sure the House would like an assurance from him that the new fund which is to be put, to some extent, in the hands of the Postmaster-General outside the usual financial control, will be very carefully invested.
I do not want to go into the question of Treasury control again. We had some cheering words on that subject from the Postmaster-General during our last discussion. He said he had come to a satisfactory agreement with the Treasury for the relinquishment of the meticulous, annoying, and rather futile control which had obtained, or might have obtained, in the past. I would like the right hon. Gentleman, however, to tell us, in regard to proposals and estimates submitted to the Treasury, which have to be approved by the Treasury, whether the duty of the Treasury will be confined to seeing that the sum which it is proposed to expend does not exceed the amount at the disposal of the Postmaster-General. That is to say, supposing the Postmaster-General puts up proposals for developing the telegraphic or telephonic systems, provided the Treasury are satisfied that he is not exceeding the sum at his disposal, are we to take it that it will not be for the Treasury to interfere in that or in any matter of policy concerning the allocation of this Fund? That is a very important point.
When this subject was previously discussed, the Postmaster-General told us —and other hon. Members spoke to the same effect—that it was very necessary that he should not yield in a rash moment to the people who wanted a penny postage and who would involve him in an annual expenditure of £6,000,000 when he had much less than that sum to play with. On the other hand, suppose that he has, say, £500,000 to play with and he submits estimates to the Treasury covering a certain amount, while the Treasury
may say, "We have looked into this proposal and it is not going to cost you more than you have at your disposal," they should not be able to say, "You must not spend on this or that subject because we object." Everything within the sum allowed should be under the Postmaster-General's control. I hope that is what the right hon. Gentleman meant by saying that there was a relaxation of Treasury control, but I should like to be assured on those points.

6.50 p.m.

The POSTMASTER-GENERAL (Sir Kingsley Wood): I very, gladly reply to the questions put by the hon. Member for Limehouse (Mr. Attlee). He repeated the statement which he made on the last occasion when this subject was discussed that he thought the contribution to be made by the Post Office to the Treasury under the arrangement with the Chancellor of the Exchequer was too high. We can all have our different opinions upon that point, but I think he will agree that in the present circumstances the Treasury have not treated the Post Office so badly. We hope, provided trade conditions are maintained, that there will be a sum of something like £1,000,000 available for the Post Office for the first time in its history, and, frankly, I do not think that in the circumstances of the time the Post Office should hope for much more at present.

Mr. ATTLEE: Surely the right hon. Gentleman does not hope that present trade conditions are going to continue?

Sir K. WOO D: No; what I said was that if the present trade conditions continued, we should have £1,000,000 available. If they considerably improve, that sum would be increased, but I do not want to raise people's hopes too high. At any rate, there is a reasonable prospect of the Post Office receiving about £1,000,000 as a start for the Post Office Fund and I repeat that, in the circumstances of the time that is not an unreasonable bargain to have made. Unlike the hon. Gentleman opposite, the hon. Member for Central Leeds (Mr. Denman) takes the view that the Chancellor of the Exchequer ought not to have done this at the present time and considering these two opposite views, I think that, on the whole, a reasonable arrangement has been made. The hon. Gentleman said he hoped
there would be no question about finality in this matter. There obviously is not. In the Clause itself the period fixed for the present arrangement is three years. At the end of that time we shall be able to see how the arrangement has worked, what is the condition of the public funds, and whether or not it will then be possible to make a fresh arrangement. In that, of course, we are following out the recommendations of the committee, and, again, I think that in all the circumstances that is a reasonable arrangement.
The hon. Gentleman also raised the question of the purposes for which the Post Office Fund might be used. I would refer him to the full statement which I made in the last discussion. He put a specific question as to whether any part of the fund would be available for depositors in the Savings Bank. The answer is "No." The interest paid to depositors in the Savings Bank is fixed by law at 2½ per cent. and, as he knows, that is rather a matter for the Treasury. The National Debt Commissioners control the Savings Bank funds and the depositors have to rely upon the Statute which at present makes provision for them. As regards the depositors, the Postmaster-General is really an agent and the investment and custody of the funds and the rate of interest are matters outside his province. That is the short answer to the hon. Gentleman on that point.
He repeated his desire, which I quite understand, that the Post Office Fund should be available for improvements in the conditions of the Post Office staff and he referred to the position with which he had to deal, as I have had to deal with it, in connection with wages in the Post Office service. On that question many inaccurate statements have been made, not by the hon. Gentleman himself, but by other hon. Gentlemen opposite who are not so well aware of the facts of the position in regard to these wages. In a previous discussion an hon. Gentleman opposite said that of the Post Office employes 23,000 received less than 40s. a week and that these were full-time employes and adult men and women. The correct figure is 22,800 and it is made up as follows: boy messengers and girl probationers, 8,900; postmen and male sorting clerks below 21 years of age, 4,500; female telephonists and telegraphists, mostly below 21 years,
6,300; women cleaners, 500; and postmen 21 years and over, 2,600. I only make that statement in order that there shall be no misunderstanding as to the exact position in this respect. The hon. Member for Limehouse knows as I do, and as he has himself explained to the staff, that wages in the Post Office have to follow the ordinary conditions which apply to the Civil Service generally. I can only refer hon. Members to the observation which I made in the last discussion on that subject.
The hon. Gentleman sought rather to widen the scope of this discussion and endeavoured to tempt me to follow him into a consideration of Sub-section (7) and of the question of the safety of the new Post Office Fund. One of the most flattering letters that I received on my appointment as Postmaster-General was from a lady in the provinces who wrote to say that she was delighted at my appointment because she felt much more sure of the safety of her savings. I can only assure the House that that compliment is well merited. At any rate, since my appointment I do not think that any of the funds have been lost, stolen or mislaid, and I can give the hon. Gentleman the fullest assurance as regards this fund and the Post Office Savings Bank funds generally, that there is no safer security in the country.
The last point which the hon. Gentleman raised was that of Treasury control. I fully explained that matter on the last occasion. I cannot confine the control of the Treasury in relation to the fund in the manner indicated by the hon. Gentleman. In fact it was recommended in the report of Lord Bridgeman's committee that the Chancellor of the Exchequer should be consulted by the Postmaster-General of the day. The committee approved of the Government of the day, or, at any rate, the Chancellor of the Exchequer inquiring into the specific application of the fund from time to time. It is true that proposals might be made by the Postmaster-General of the day which would require less than the sum available. It might be argued that the Exchequer therefore had no further interest in the matter, but we have to look not only to the application of the fund on one particular occasion but to the possibility that what is done with the fund on that occasion, may have effects
in relation to the fund in the next year, or in the next two or three years. Generally, my answer to the hon. Gentleman is that the Postmaster-General must consult the Chancellor of the Exchequer as to the specific application of the fund. I know that not all of these explanations will be agreed to by the hon. Gentleman, but he will share my hope that this fund will be available to the extent I have indicated, and that it will be used by the Post Office for the benefit of its customers- He and I, while not agreeing upon the amount, will, I think, agree at any rate that its establishment is an important event in Post Office history and something which has been desired both by my predecessors and by myself.

7.0 p.m.

Mr. DENMAN: I should like to raise the points with which my Amendments deal. I am sure we all appreciate very heartily the way in which the Financial Secretary to the Treasury has met us all in argument, and we should like to release him as soon as may be. If he will answer the questions I have to put to him, he will be able to get away to his well-earned rest. Certainly we ought to have some answer from the Treasury to these questions, for they have not yet been answered. It is a very remarkable circumstance that Part IV of the Bill which gives to the Post Office £1,000,000 of the money of the Chancellor of the Exchequer, has never been defended as a financial measure from beginning to end. It was not mentioned in the Budget. When objections were raised on financial grounds in the Committee stage of the Resolution, and on the Committee stage of the Bill, there were answers from the Postmaster-General, but not from the Treasury.
We ought to get an ample reply from the Treasury to the questions of whether we can afford it and, if we can afford it, whether this £1,000,000 should be handed back to the Post Office. There is some score of other ways we could suggest in which it might be applied. To expect the Postmaster-General to answer these questions is like putting up the Home Secretary, who is the State brewer, to defend the remission of the Beer Duty. I am glad that the Financial Secretary is here to defend this grant of £1,000,000. Can we afford it? We know the conditions of the public revenue. It is sin-
gularly ill-equipped to hand over £1,000,000 to anybody. The first Amendment I have on the Paper makes one simple financial test. It suggests that this fund shall not come into force until we meet the Sinking Fund or specific Government loans which have to be met out of revenue. Surely that is one of the first conditions of a sound financial situation. We all remember the special circumstances of this Government. We are not meeting the actual Sinking Fund required under the conditions of certain Government loans.
If I remember rightly, the amount required for these Sinking Funds is £7,000,000. That we have to meet by borrowing, thus going back to the system utilised after the Napoleonic wars, which created some ridicule among the economists. We all, of course, recognise that it is a wise provision for this year. To give away £1,000,000 before we meet the statutory sinking funds is, however, premature. That is the first point—can we afford it? As the Financial Secretary has pointed out, it comes not from this year's revenue but next year's. All we know with certainty is that the tax remissions of this year will be more expensive next year to the Treasury. We shall be some £2,000,000 down on tax remissions next year. We shall, therefore, be less able to meet this £1,000,000 in 1934, unless there is a trade revival, or some elasticity of our taxes on which at the present time we have no sound ground for speculation. I suggest that this is the first occasion on which our Chancellor of the Exchequer is being thoroughly unsound.
The second point is that, assuming we can afford this £1,000,000, is this the way we want to spend it? My second Amendment provides that if the £1,000,000 is given it shall be a £1,000,000 on top of the Post Office surplus—not the present Post Office surplus, but the next £1,000,000. If anyone thinks that any number of Members really wish the first £1,000,000 of relief to be given to the Post Office, then he has entirely misunderstood the whole trend of our Debate. A concession, if a concession is given, might be applied to obsolescence of machinery, allowances of Income Tax, or the restoration of cuts, not to mention such things as judges' salaries. There are scores of things to which, probably,
every Member would wish priority to be given, other than the Post Office. We ought, before the Finance Bill leaves this House, to have some very clear defence of this unexpected and, to me, unwelcome generosity. The House was agreed that the Post Office fund should be set up. All I object to is that this particular £1,000,000 should at this moment be allocated. If it were £500,000, my objection would be less. If it were £1,000,000 on top of the existing Post Office surplus, I would welcome it, but to take it from our present tax resources—although it is to be put to an excellent use, we all agree —is not what any substantial number of Members of this House desire. All the commercial interests in my constituency will highly resent it.

7.8 p.m.

Mr. C. BROWN: I would not have intervened but for the speech of the hon. Member for Central Leeds (Mr. Denman) to which we have just listened. The hon. Member belongs to a section of the National Government whose attitude on a question like this is extraordinarily interesting to some of us. I may remind the House that he is a National Labour Member. I cannot understand how he can get up and make a speech, such as the one he has just delivered, on the assumption that the Postmaster-General and the Government are doing something rash. Surely there is nothing being done on this occasion which can be characterised as rash or indiscreet. I recollect the Postmaster-General at the time of the last Government. There has been a change in his attitude since he became a Minister, a change which is very remarkable indeed. I have never witnessed such a transformation in an individual. The Postmaster-General has spoken in a very minor key, contrary to the usual speeches he used to deliver. I could not help thinking, when he was talking to us, that nobody need have any fear of his doing anything rash with Post Office funds or developments. How the hon. Member can imagine that this Government will be guilty of extravagance, or rashness of any description, passes my comprehension.
Perhaps it is in keeping with the tradition and the creed of the party to which the hon. Member belongs that they should repeatedly ask, "Can we afford it?" That is going to be the constant refrain
of the National Labour supporters of the National Government. If it had not been for the miserable pessimistic utterances to which we have just listened I would not have intervened. We need have no fear that the Postmaster-General will do anything rash, or anything likely to imperil any funds. He will not even risk these funds in giving better conditions to Post Office servants. The hon. Member for Central Leeds need have no fear. Let him remain loyal in his support of the National Government, for they will do nothing rash or indiscreet.

7.12 p.m.

Mr. HORE-BELISHA: When I disappeared from the view of the House I received an S.O.S. from the Member for Central Leeds (Mr. Denman), who thought it scandalous that a Clause of this kind should be passed without my making some observations upon it. I accordingly submit myself to his catechism. He wishes to have an answer to two questions. The first is whether we can afford what he was pleased to describe as "it." I reply that I have read in Boswell that when Dr. Johnson described a lady as an "ass," she complained, whereupon he said, "If I had not meant it I should not have said it. "My reply is that if we could not have afforded it we should not have introduced this Clause. We believe that the increase in trade and business that would accrue from putting the Post Office on a new foundation will amply repay us.
My hon. Friend's second question was whether there was no better object on which we could spend it. I think that the more we can do for trade and business the more we shall do for employment. It was not right and just that we should continue to exact a higher contribution, for instance from the telephone subscribers, than the occasion merited, if the Chancellor of the Exchequer could assist the Post Office to develop the telephones and give a better service to the country. I hope these two clear and concise answers will remove any misapprehension in my hon. Friend's mind.

Mr. ATTLEE: I beg to ask leave to withdraw the Amendment. Amendment, by leave, withdrawn.

7.14 p.m.

Mr. DENMAN: I beg to move, in page 26, line 22, to leave out the word
"eleven," and to insert instead thereof the word "twelve."
Perhaps after the very courteous reply of the Financial Secretary to the Treasury, I need not move my first Amendment—In page 25, line 19, at the beginning to insert the words:
When the Public Accounts Committee has reported that in the preceding financial year the sinking funds, in respect of specific British Government loans have been met out of revenue, and"—
I move my second Amendment because it is of great importance, and has not yet been answered. Everybody who votes with me on the question of whether this £1,000,000 should come out of existing revenue, or should come from any revenue which, we hope, the Post Office will easily be able to earn in more prosperous times, will have the blessing of his constituents.

Mr. SPEAKER: There being no Seconder, the Amendment lapses.

Orders of the Day — SIXTH SCHEDULE.—(Provisions as to Re importation and Re-exportation of Certain Goods.)

Amendment made: In page 37, line 10, leave out the word "therefrom," and insert instead thereof the word "thereof."—[Mr. Hore-Belisha.]

Orders of the Day — SEVENTH SCHEDULE.—(Amended Rates of Duty in the case of certain Mechanic ally-propelled Vehicles.)

7.15 p.m.

The MINISTER of TRANSPORT (Mr. Oliver Stanley): I beg to move, in page 38, line 12, column 1, after the word "which," to insert the words:
are constructed or adapted to use coal gas as fuel, or which.
Hon. Members will recollect that in Committee the hon. Member for Newport (Mr. Clarry) and the hon. Member for Doncaster (Mr. Molson) raised the question of the taxation of coal-gas vehicles, and I promised them that I would look into the matter because I felt that in view of some of the facts they mentioned I had rated the immediate possibilities of this entirely new form of locomotion rather too highly. In consequence I am to-day moving certain Amendments which will put the coal-gas vehicle on exactly the same footing as the steam vehicle. The Amendment which I now move refers to hackney carriages driven by coal-gas, and later I shall move similar Amendments which will extend the same con-
cession to goods vehicles. I would, however, repeat the warning that I gave during the Committee stage, namely, that I am making this concession because of the limitation of the immediate possibilities of these vehicles. If at any time they should make such an advance as to compete on more equal terms with other forms of vehicles that are more highly taxed, it will be necessary for me to reconsider the scales now proposed.

Amendment agreed to.

Further Amendments made:

In page 39, leave out lines 2 to 20.

In page 40, line 35, column 1, leave out the words "carry or haul no," and insert instead thereof the words "neither carry nor haul any."—[Mr. Stanley.]

7.17 p.m.

Mr. ROSS TAYLOR: I beg to move, in page 42, line 16, at the end, to insert the words:
For the purposes of this paragraph the weight unladen of any vehicle shall be taken to be the weight of the vehicle inclusive of the body and all parts (the heavier being taken where alternative bodies or parts are used) which are necessary to or ordinarily used with the vehicle when working on a road but exclusive of the weight of—

(a) water fuel accumulators (other than boilers) or coal-gas containers used for the purpose of or in connection with the supply of power for the propulsion of the vehicle; and
(b) loose tools and loose equipment."
The object of this Amendment and of two consequential Amendments which will be moved later, is to provide that in estimating for tax purposes the unladen weight of a gas-propelled vehicle, the weight of the cylinders which contain the gas shall be excluded. This is a request for another small concession to the gas-propelled vehicle. The term "unladened vehicle" is defined in the Roads Act of 1920, Section 7, Sub-section (6), which provides that:
The weight unladen of any vehicle shall be taken to be the weight of the vehicle inclusive of the body and all parts (the heavier being taken where alternative bodies or parts are used) which are necessary to, or ordinarily used with the vehicle when working on a road, but exclusive of the weight of water, fuel or accumulators (other than boilers) used for the purpose of propulsion, and of loose tools or loose equipment.
That definition is used for the purpose of the Finance Acts in determining the duty payable by vehicles which are taxed by
weight. Gas-propelled vehicles under that definition would be weighed with the gas cylinders attached and the weight of those cylinders would be included. No doubt that is due to the fact that when the Roads Act was passed this form of gas propulsion was not in use. In any event I hope that the Chancellor of the Exchequer will be prepared to bring these vehicles on to the same level as other vehicles. The House will notice that the definition makes it clear that the accumulators of electrically-propelled vehicles are not included in the laden weight. The steel cylinder for storing gas is in very much the same position for tax purposes as the accumulator for storing electricity. The matter is of some practical importance to those who are interested in this new form of propulsion, because these cylinders weigh a considerable amount, and the result might be that a vehicle would be raised to a higher category of tax if weighed with the cylinders in position. There are other technical difficulties which this new form of propulsion has to overcome, and I hope that the Chancellor of the Exchequer will make this concession.

7.21 p.m.

Sir CHRISTOPHER CLAYTON: I beg to second the Amendment.
I do so because of the newness of this procedure of running motors on gas, and the fact that it is going to be very much handicapped by the great weight of the cylinders. Should there be a very big development in this direction, of course the Minister of Transport can easily make alterations, but during the period when we are trying a new experiment it seems very hard that we should be heavily handicapped by weighing in the cylinders with the machines and consequently raising the taxation of the vehicle.

7.22 p.m.

Mr. HERBERT WILLIAMS: I would add my plea to those of my hon. Friends. I am told that there are about a dozen of these vehicles now in existence. Therefore whatever happens it is not going to wreck this year's Budget, and any danger financially lies in the future. On the other hand if these new vehicles are a success, they will make a profound change in the whole economic situation. At the moment our fuel imports are practically equal to our fuel exports. That position would have been quite undreamed of a few years
ago. The whole of our economy has been profoundly disturbed by that fact. If this experiment is a success the situation will be entirely altered. In another branch of transport there is a very good analogy. In assessing the net weight of ships for the purpose of harbour dues the authorities take into account only earning capacity; they leave out of account the space occupied by the propelling machinery and by crew. We are not going quite as far as that, because we are not leaving out the weight of the driver's seat. But in principle we seek to establish the same thing. As it has already been conceded in the case of the heavy batteries used in the electrically-propelled car, I hope the Minister will accept this Amendment.

7.24 p.m.

Sir S. CRIPPS: I would like to add my plea to the Minister that he should accept this Amendment, which does not seem to raise any particular question of party but does seem to raise an important question as to the possibility of developing an alternative use for coal in this country. In view of the fact that, as the last speaker said, the financial results this year can be hardly anything at all, owing to the very small number of vehicles at present being used for experiments, I am sure that the Minister of Transport would please everyone if he said that for this year he will make this concession in order to give this new form of alternative possibility in the use of coal the best chance of establishing itself in this country.

7.25 p.m.

Mr. STANLEY: I must own that while I have been listening to the speeches on the Amendment I have felt that the speakers ought to have the privilege of bearing the same Christian name as myself, because this is a clear case of Olivier asking for more. No one who has listened to the Debate would realise that I have just moved an Amendment which gives to these particular vehicles a very large concession indeed. On the last stage of the Bill I discussed both these questions together, and I said that, although I was not prepared to give the concession which is now demanded, I would consider the other concession. It may interest the House to know that I had considerable doubt afterwards whether I had been wise in making that
concession, because at the very moment when hon. Members interested in this matter had been making the appeal to me on the ground that really the immediate possibilities of these particular types of vehicles were not nearly as glowing as I had presumed, a learned counsel, instructed by one of the owners of these vehicles, was making an appeal in another place to my right hon. Friend on the ground that these particular vehicles were perhaps the hope of the country in the future. I decided that on the whole I was justified in making the concession that I did make, because at the moment there are certain limitations on these vehicles. But I should not have been prepared to make that concession had I known that I was also to be asked to make a further concession of this kind. These gas cylinders are not very different from the petrol tank, which is just as necessary to the petrol-driven vehicle as the cylinder is to the gas-driven vehicle. Therefore, if we are to include the weight of the petrol tank in the unladen weight of the petrol vehicle, we have equally good ground for treating the gas cylinder in the same way.

Mr. R. TAYLOR: The fuel in the petrol tank is excluded by the definition. The petrol tank is very light.

Mr. STANLEY: So no doubt will the gas in the gas cylinder be excluded.

Sir S. CRIPPS: And the air.

Mr. STANLEY: I feel that in the concession already made I have gone a very great way to meet the views of hon. Members. If this new experiment, which we all want to see developed, succeeds, it will help home-produced fuel. If it can develop on commercial economic lines it will be able to do so under the taxation that is proposed. I cannot accept this extension of my concession.

7.28 p.m.

Sir JOSEPH NALL: I am sure that the House appreciates the point of view of the Minister of Transport, and in the circumstances of the case I think he has gone to a very reasonable extent in meeting the request made to him. I ask him to have in mind for further consideration a matter relating to these vehicles which has not been so far raised. These other than petrol vehicles are necessarily limited to a very local scope in work,
and as such they do not come into the category of transport which has been in competition with other established branches of transport, as to which there has been controversy regarding the general increase in the taxation of road vehicles. As these vehicles are strictly limited to a local scope and may more properly be regarded as ancillary to the railway services than the petrol vehicle usually is, I think there is a case for considering them specially in regard to taxation, not only at this moment, but in any future consideration which the Minister may be giving to the matter. The more we can develop the local vehicle which may be used for local purposes in no way antagonistic to the railway services, and which may be complementary to the railway services, the more the principle which lies behind these general proposals for amending taxation will be facilitated. I am sure that in all the circumstances we ought to be grateful to the Minister for the concession that he has made.

Mr. R. TAYLOR: I regret that the Minister has been unable to accept the Amendment, but in the circumstances I beg to ask leave to withdraw it.

Amendment, by leave, withdrawn.

Amendment made:

In page 44, line 9, column 1, at the end, insert the words:
or which are constructed or adapted to use coal gas as fuel."—[Mr. Stanley.]

7.30 p.m.

Captain STRICKLAND: I beg to move, in page 44, line 40, to leave out from the second word "exceeding" to the end of line 45, and to insert instead thereof the words:



£
s.
d.
£
s
d.


"3½ tons in weight unladen
42
10
0
56
13
4


Exceeding 3½ tons but not exceeding 4 tons in weight unladen-
50
0
0
66
13
4


Exceeding 4 tons in weight unladen—








for the first 4 tons
50
0
0
66
13
4


for each additional half ton or part of half ton
10
0
0
13
6
8"


I feel somewhat in the position of the importunate widow who by persistence at
last gained her point, because I have to suggest to the House that they might feel disposed, through the Minister of Transport, to accept a somewhat similar proposal to the one which was made in the Committee stage of the Finance Bill. It is, however, different from the proposal made on the Committee stage, which was not only for the purpose of trying to obtain a more easily graded step in the taxation of goods vehicles, but to secure a reduction of taxation. Our present proposal cuts out the idea of trying to secure any reduction in the actual amount of taxation of these goods vehicles but suggests that the Minister might feel disposed to concede the point at least of grading the steps of taxation in such a way as to be helpful to the trade and to those whose livelihood depends on the goods traffic of this country. I am somewhat encouraged, perhaps more encouraged than the importunate widow, in that the Minister when he resisted the form of the proposal in the Committee stage, speaking of the dual proposal for the reduction of taxation coupled with the easier grading of the steps, said:
One is the old step of a half-ton scale. In itself, that is not harmful, and in fact it might be an advantageous proposal. It would add a certain amount of administrative difficulty, but that might not be much in comparison with certain advantages it would give the manufacturer.
He went on to say:
It is extremely expensive also, and. would result in a large loss to the revenue."—[OFFICIAL HEPORT, 1st June. 1933; cols. 2236–7, Vol. 278.]
I do not need to traverse the ground already covered, but I would point out that if a man has to decide between the choice of a certain vehicle weighing unladen five tons and a vehicle that weighs a little over five tons, he is faced with the certainty that that very slight increase which might bring the vehicle to over five tons unladen weight would cost him £20 in increased taxation. The tendency would naturally be for him to buy the vehicle that would come under the lower weight. That is a manufacturing point of considerable importance connected with the motor industry. I hope that it may be found possible for the Minister to accept the Amendment considering the generosity that we have witnessed this afternoon in regard to other forms of motor taxation. It was urged against the acceptance of the former resolution
that, it would mean a lost of revenue of £675,000.
One can say with a certain degree of probability that if the new Amendment were conceded there would not be a loss of revenue but in all probability an increase of revenue arising from it, because the man who in consequence of the heavy tax would buy the lighter weight vehicle would be paying to the revenue a less amount than he would pay if he was only faced with a £10 tax instead of a £20 tax and bought a heavier vehicle. He would have the temptation to buy a stronger and better constructed vehicle for his work as a result. If he buys the better constructed vehicle it would bring in an extra £10 into the revenue which would not be there otherwise, because under present circumstances he would try to keep his weight down just under the tonnage level rather than over. Under this Amendment the duty is exactly half on the half ton rate, so that the general rate comes out at exactly the same level as it would do under the proposals made in the Finance Bill.
At this particular moment in the history of goods vehicles in this country there should be extended the utmost concession that can be reasonably and possibly (made, seeing the tremendous burden placed on goods vehicles, not only by restrictions which may or may not occur owing to the operations of a Bill now being discussed in Standing Committee but also by virtue of the extraordinary heavy increase in the duty. If this increase in duty can be somewhat tempered by a concession on the part of the Government on the lines now suggested, I am sure that it would be an approach towards the trade which would be very greatly appreciated in these difficult times. It might be necessary later on to readjust the matter, but at this moment one feels a certain amount of confidence in submitting this proposal to the House with a view to seeing whether the concession could not be made as a gesture to the trade, realising that the prosperity of the goods vehicle trade means the prosperity of the workers engaged in that trade, and that if that could be done it would be a great help both to manufacturers and workers. Therefore, I ask the Minister to give his very careful consideration to the matter and see whether
he could not open his heart and grant this concession, for which we ask in all sincerity and earnestness, because we believe it to be a right, fair and just suggestion and one that would be greatly appreciated by all connected with the motor vehicle trade.

7.38 p.m.

Sir ARTHUR STEEL-MAITLAND: I have great pleasure in seconding the Amendment. In itself it is a small matter that we are putting before the House. It only means substituting half-ton steps for whole ton steps in the matter of the unladen weight of these petrol-driven vehicles. It does not involve any plea for a reduction of duty as a whole but only that steps should be half-ton steps rather than ton steps. The whole industry concerned with lorries and road haulage are very anxious that it should be passed, and I would suggest to the Minister of Transport and the House that at the present time, although they may feel that there must be a general increase of licensed duty as a whole for the reasons of the Exchequer and the need for revenue, it may be wise to try to mitigate any feelings of disappointment or any sense of unfairness by giving this small concession. I cannot believe that it will cost the Exchequer much money. I am inclined to think that the road hauliers themselves perhaps over-estimate the amount of pecuniary advantage that they will get from it, but that they do set store by it is undoubted, and I believe that there is something in the view put forward by my hon. and gallant Friend. The possible loss due to the road haulier taking advantage of the smaller step in order to get his vehicle on the cheaper grade is likely to be offset in great measure by the encouragement to people to get a rather heavier or sounder-built type of vehicle, knowing that if he goes into the next step which he would not otherwise have done he will not be called upon to pay the whole of the duty.
Those who think that the road hauliers have a strong case, as I do, have no desire to embarrass the Government. Although the mind of the Government may be made up on the Report stage on the general question of an increase in license duties, I hope that they will see their way to grant this small
request. The Amendment has been put down to this part of the Schedule only. It may be argued that in that case it makes an unevenness between the scales applying to one particular class of existing vehicles and other classes. We can only say that if the Amendment had been put down to the different parts of the Schedule it would have presented a very cumbersome appearance. We did not want to overload the Order Paper with Amendments, but it would be perfectly possible, if the Minister so wished, to make this apply to the other classes at a later stage. I can hardly imagine that this Bill will be certified as a Money Bill. Therefore there will be opportunity, without any risk of loss of time in this House, to make this apply to the other goods vehicles at a later stage in another place. We have put down an Amendment which applies only to the largest class of these vehicles, which probably form three-fourths of the whole. I hope that as the Minister in regard to gas-driven vehicles has already made a large concession to-day and that he put that forward as a reason for not necessarily giving another concession, he will realise that in regard to this class of vehicle concessions have not been made in the course of this Finance Bill. I trust he will see his way to grant this particular concession, which is so much desired.

7.44 p.m.

Mr. STANLEY: I am much obliged to my hon. and gallant Friend who moved the Amendment because in doing so he not only gave the reasons why I should accept it but by quoting the speech I made on a previous occasion he gave the reasons why I was not able to accept it. On the Committee stage I think my right hon. Friend the Member for Tamworth (Sir A. Steel-Maitland) moved a composite Amendment which reduced the general scale proposed in the Bill and introduced this half-ton step. This Amendment leaves the scales as they are proposed in the Bill and deals only with half-ton steps. So far as the reasonableness of the principle has been recognised, I can only repeat that at various times this House has decided that the half-ton step shall be introduced, until now the scale goes up to three tons in half-ton steps. It is true, of course, that the more you develop that principle, the more there is a certain amount of extra administra-
tive work, but the real objection to the Amendment is the objection of cost. Every increase that you make in the half-ton steps means less revenue, and it is on that ground that I was unable to accept it on the previous occasion and that I am unable to accept it to-day.
The hon. and gallant Member appealed to my generosity and said that I had been so generous on the last occasion, but I must point out that on that occasion my generosity cost me nothing, and on this occasion it would, I fear, cost me a great deal. Through no fault of my hon. and gallant Friend who moved the Amendment, I received notice of it only an hour or so ago, and it has been impossible for me to get an accurate estimate in that time of what the cost would be, but it would certainly be substantial. I think I am safe in putting at least at six figures the cost of this Amendment, and I am afraid that the contention that I should not lose but gain by accepting it is one that our experience in the previous extensions of this half-ton step does not bear out. I could not afford to sacrifice the revenue which this Amendment would entail.
Again, the acceptance of this Amendment would mean that an equivalent sum of money would have to be raised by raising the general scale of the tax, and that, I do not feel, would really benefit those who have to pay it. On the other hand, I can assure my hon. and gallant Friend that I understand the considerable amount of importance—perhaps my right hon. Friend was right when he said too much importance—that is attached to this matter by the manufacturers and the taxpayers, and it is certainly one of those things which I should bear in mind if a happier day ever dawned and it became my duty and privilege, not to put more taxes on the motor taxpayers, but to relieve them of some of these taxes that they now bear. I am afraid that in the existing circumstances I am unable to accept the Amendment.

7.49 p.m.

Captain STRICKLAND: I want to acknowledge the great courtesy of the Minister and the Chair in permitting this manuscript Amendment to be brought before the House. It is not quite fair to the Minister to expect him to answer this question, and therefore, with the permission of the House, I would like to
withdraw the Amendment and to express the hope that in the coming 12 months the Minister will devote special attention to this point in order to see whether it might be carried into effect in another year.

Amendment, by leave, withdrawn.

Amendment made: In page 45, leave out lines 6 to 22.—[Mr. Stanley.]

7.50 p.m.

Mr. STANLEY: I beg to move, in page 45, line 43, at the end, to insert the words:



£
s.
d.


"(i) being vehicles chargeable with duty under sub-paragraph (b) of this paragraph and used for drawing a trailer which is used solely for the purposes of his business by the person in whose name the vehicle is registered
10
0
0


(ii) other vehicles."





On the Committee stage in response to an Amendment moved by the hon. Member for Stratford (Mr. Groves), I promised that I would give further consideration to the question of the scale of taxation of showmen's trailer vehicles, and it is in consequence of that promise that I put down this Amendment, which makes a considerable concession to them. My hon. Friend the Member for Stratford, who is particularly interested in this question and who has done a great deal to bring it to my attention, explained to me that for important reasons he was unable to be here this evening, but he has discussed the matter with those principally concerned, who feel that this concession does meet their point of view.

Amendment agreed to.

Further Amendment made: In page 46, line 1, leave out the word "duties," and insert instead thereof the word"duty."—[Mr. Stanley.]

Orders of the Day — SCHEDULE 8.—(Enactments repealed.)

Amendment made: In page 47, line 4, at the end, insert the words:


"43 and 44
The Spirits
Sub-section (4) of section ninety-five."

—[Mr. Hore-Belisha.]

Bill to be read the Third time upon Friday, and to be printed. [Bill 121.]

LOCAL GOVERNMENT AND OTHER OFFICERS' SUPERANNUATION (TEMPORARY PROVISIONS) BILL.

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."

7.54 p.m.

Mr. MICHAEL BEAUMONT: I beg to move, to leave out the word "now," and, at the end of the Question, to add the words, "upon this day three months."
I regret that I have to make some remarks upon this Bill before the Minister has had a chance of explaining it, but it is probably well known in the House. In various guises we have met it before. It originally came before us as a private Member's Bill in the last Session, when I, among others, was instrumental in causing it to make no further progress. Like all or nearly all purely Departmental Measures from the Ministry of Health, it has a thoroughly attractive and seductive exterior, but when investigated it is thoroughly unsound and dangerous. What this Bill does, the Parliamentary Secretary will tell you, is to legalise certain illegal actions taken by local authorities. I hope the House will pardon my giving a small explanation of the Bill, but it is necessary to do so in order that my remarks may be made clear, as we have not had the advantage of an exposition from the Parliamentary Secretary.
The position when the economy cuts occurred was peculiar as regards local government officers. It was decided at that time, rightly or wrongly, that it was necessary that all official salaries should be immediately reduced, and the Government servants under the direct employment of this House had an immediate reduction in their salaries—teachers, police, Army and Navy, Members of Parliament, and other more or less useful servants of the State—but the local government officers, while in some respects in an analogous position, were servants, not of this House, but of the local authorities. It therefore became necessary, if they were to come into line with the rest of the public servants, that the local authorities should come to special arrangements each with its own employés. There could be no all-round cut. Let
me at once pay a tribute to the very generous spirit in which these local government employés did in fact come forward and, in a majority of cases, voluntarily offer a substantial reduction in their salaries, in abrogation of the agreements under which they were working, as their contribution in the national crisis. As I am sure every hon. Member will agree, the way in which they took that action was worthy of the highest praise.
The question came, as it came over all the cuts, wherever there was any form of contributory pensions scheme, as to what was to be the effect of the cuts as regards pensions. As far as this House is concerned, I will only mention the case of the teachers, but it was decided—I am making no comment on the decision now, but shall leave that to the hon. Member for Caerphilly (Mr. Morgan Jones), whom I see waiting, tiger-like, for his spring—that the teachers' pensions should suffer the same cut as their salaries; that is to say, that their contributions and those of their employers should be reduced and, consequently, that the final sum for pension should be reduced. Actually in that particular case, owing to the peculiar way in which their pensions are assessed, those reductions would in most oases be very small. Then came the question of what was to happen to local authorities, whose employés are employed under various schemes. They do not by any means all have the same superannuation, and it is interesting to note that this is the first occasion on which a Bill is being passed in this House to deal with the whole field of local government servants' pensions.

Mr. GREENWOOD: No.

Mr. BEAUMONT: The right hon. Gentleman opposite says "No," but I thought that that was so. Some local authorities accepted the cuts and carried out what was then, I understand, their legal obligation, by applying the cuts to the pensions. Certain other authorities, either knowingly or unknowingly, applied the cuts but said that they should not apply to the pensions. That was an illegal act, and this Bill is an indemnity Bill to indemnify those authorities. The local authorities which had not the power under the law as we passed it to make cuts without reducing pensions did so in
some cases, and, as I said, they did it knowingly, and this Bill is to indemnify them. The Bill originally introduced in the last Parliament by the hon. Member for Central Wandsworth (Sir H. Jackson) went much further and allowed all local authorities, as far as I can remember, for all time in the future to make that alteration and to exempt pensions from the cuts. If that were the case to-day, I should be opposing this Bill far more bitterly than I am. The Government realise that that would be extremely difficult, and they are in the difficult position of these authorities having done this thing and come to certain agreements with their employés. What action should the Government take?
My objection to this Clause is two-fold. In the first place, we say that local authorities should not be allowed to play fast and loose with the law. Laws govern local authorities just as they govern private individuals, and they should be upheld. I am convinced that for every case where this was done unwittingly there were three cases in which it was done with a deliberate attempt to evade the obligations of the cuts. Therefore, we say that it is a most dangerous principle and precedent that local authorities who evade the law and act in a sense contrary to that in which Parliament has determined should be allowed to escape with an indemnity in this manner. Secondly, we say that you are giving under this system a preferential treatment. You are penalising certain authorities that have kept the law as against certain others who have broken it. That is to say, that the employés of the good authorities which have kept the law are going to be in a position to say to their employers, "If you had broken the law we could have got our pensions all right, and now we have to suffer because you are law-abiding." It is an incitement for local authorities in future to ignore laws if they do not happen to like them and if they can get away with it.
I am not arguing the point whether pensions should or should not be affected by the cuts, but I cannot see why an exception should be made in the case of local government officers. Local government officials are a very deserving body of people. The faults of the local government system are not their faults, and in many cases the officials are deserv-
ing of the highest praise. I have every sympathy with the teacher who says, "Why should my pension be affected when the director of education or a clerk in the education office gets away with it without a cut?" There can be no question of altering it as far as the teachers are concerned, but we do resent very much that local government officers, because they are not servants of this House, but are servants of the local authorities, should have preferential treatment. No one who remembers the discussions on the Economy Bill and the Debates on this matter could doubt for a moment that if it had been possible for this House to deal directly with local government officers, their pensions would have suffered as the teachers' pensions did. They are in a different position. Why should they, because they are only employed indirectly by the State, have preferential treatment? In view of the moderate character of the Bill, I am not going to press my opposition to undue lengths, but I want to place it on record that I think that this is a most dangerous precedent, and that this is a Measure which ought not to have been introduced.

8.5 p.m.

Captain CROOKSHANK: I beg to second the Amendment.
The Bill deals with only a small field, as I understand it, because if hon. Members refer to it, they will see that it is only a question of such local government officials who had received from the local government authority which was their employer an undertaking or, as the Bill says, an understanding, that their case would not be affected by the cuts. It does not therefore apply to all local government officials by any means. The Bill, however, opens up a much bigger problem than that. The question of the cuts in salaries and wages under the various economy orders applied over a large field, and, as far as pensions are concerned, they have been treated very differently in different parts of our public life. With regard to civil servants, I would refer hon. Members to the report of the Comptroller and Auditor-General on the civil appropriation accounts last year, where it will be discovered that the higher ranks in the Civil Service who may retire during the period in question will receive their pensions worked out on a scale of their nominal salaries as opposed
to their abated salaries. That section of employés has been treated very generously. I do not want to say anything which implies any criticism of any local government officer or civil servant.
I want to indicate to the House that there is a difference in the treatment between various branches of the public service. The teachers, on the other hand, as I understand—owing to this Debate coming on unexpectedly I can only give the general facts and not the actual references—the teachers who came under the economy cuts and have since been pensioned have had taken into account the fact that theirs was an abated salary and not the nominal value that it would have been except for the cuts. There you have a difference between the higher grade in the Civil Service on the one hand and the teachers on the other. The police, I find, are like the higher grade of the Civil Service and get their pensions on the unabated salaries. That is to say, though their salaries and wages have been reduced by the cuts, their pension rights are not affected. We therefore have on the one hand the police and the higher grade of the Civil Service dealt with in one way, and teachers dealt with in another. But let the House observe that Parliament has not legislated on the subject in any way up to now. We have not as a House been aware of this fact and the Government have not asked us to deal with the problem.
In this case, as I understand it, certain local authorities acted illegally in giving an undertaking to their employés that they would give them their pensions on the basis of their unabated salaries. The undertaking may, or may not have been ultra vires, but on the assumption that the local authorities could give it, the Parliamentary Secretary asks us as a House to give retrospective legislative sanction to action taken by the employers of the particular local government officers. Although we have technically moved the rejection of the Bill, it is not the desire of anybody in the House to do anything that will break an undertaking, honourably given no doubt by the employers concerned to their servants, who honourably accepted it. It therefore places the House in an awkward position because we are not dealing with those who are servants of the House and the Treasury will not be responsible for any of the cost at any
stage of the proceedings, as is indicated by the fact that the name of the Financial Secretary is not on the back of the Bill. Owing, however, to some difficulty that has arisen, we have to give sanction to this honourable undertaking, and therefore we are practically forced to agree to the Bill.
I agree with my hon. Friend that it is right that somebody should put in a caveat on behalf of the House and the taxpayers and ratepayers at large that this is an unfortunate affair and that we hope that no one will consider it as a precedent, because we realise, and I am sure that the Government realise, that before very long they will have to make up their minds on this very difficult question. They cannot say, and I cannot say, whether the cuts are going to last any length of time, but it stands to reason that if we are to anticipate that the cuts in salaries and wages are to continue for a considerable period, both in local government service and in the Civil Service, obviously it must come to the consideration of this House what is to be the position with regard to the whole pensions system. It does not really affect the question whether they are contributory or non-contributory so far as the essential matter of principle is concerned. The principle is that if you have a certain nominal salary and if it is reduced by cuts to a lower level, are you to consider your salary what you get or what you ought to get? That principle opens up the question of the expenditure of hundreds of thousands, if not millions of pounds in future. That is why we are really sorry that we should have been driven into the position that, in order to make good an honourable undertaking given by people who may or may not hace been the right people to give it, we have the power to condone a principle which, judged on its merits, the House might very well not wish to condone.
It must be remembered in all these cases with regard to pensions that in whatever Vote passes through this House there are tremendous and growing pension charges, and in a time like this, when the national and local finances are in a somewhat parlous condition, it is not right that under cloak of a no doubt very proper and just Bill of this kind, we should formally assent to any principle
without a much greater Debate than will come to-night as a result of the Finance Bill having collapsed at an earlier hour than most people expected. Therefore I enter a caveat that this House will have to deal with the problem on far larger lines than appears from this Bill. Though I certainly have no desire to divide the House against it, I do not see how we can avoid passing it in the circumstances which have arisen, but the House wilt seriously have to consider before very long what action it proposes to take to remove the anomalies which are to-day, to-morrow and every week arising with regard to the differences in the treatment of pensions of civil servants, policemen, teachers, and a great many other grades of civil servants and employés of local authorities. It is because this is the only way in which we can call attention to that fact and to make these observations on the Floor of the House, that I Second the Amendment.

8.15 p.m.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): I pologise to the House for the fact that owing to the popularity of the Finance Bill I was not here in time when this Measure came on. I would assure the House that my absence indicates no lack of courtesy, and in fact I was, I think, only five seconds late, but my hon. Friend the Member for Aylesbury (Mr. Beaumont) forestalled me. I do not object very much to his description of this Bill, but perhaps it will be better if I explain it in my own way as shortly as possible. I hope to be able to show the House that it is really a humble Measure, a non-controversial Measure, and at the same time a Measure of justice enabling local authorities to keep faith with their employés. The House will remember that in the autumn of 1931, when sacrifices were demanded of the nation, the Government asked local authorities to discuss with their employés whether they too could not join in making their sacrifices by accepting a reduction of their remuneration.
The House will probably know that in certain cases local authorities cannot reduce the remuneration of their employés without their consent. In order to encourage their consent in certain cases those local authorities said, "If you agree to a cut in your remuneration we think it right that your pension shall not be
reduced." I do not imagine for a moment that they were suggesting anything which they knew to be illegal; the whole field of superannuation law is so complicated that I imagine they thought they were acting within their powers. At any rate there was an honourable obligation entered into between the local authority and its employés, the employés saying, "We agree, in the interests of the nation, to accept so much reduction in our pay," and the local authority saying, "Very well, as your pay governs the rate of your pension, we shall consider that no reduction has been made as far as pensions are concerned." All the Bill does is to give effect to that agreement. The House will also remember that the London County Council promoted a Bill to remedy this state of affairs as regards the area under their control. The House will further recall that my hon. Friend the Member for Central Wandsworth (Sir H. Jackson) introduced a Bill of rather wide scope and with certain elements of controversy in it, as my hon. Friend the Member for Aylesbury and my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) have indicated. But we thought that at this time of the Session there could be no controversy if we enabled those local authorities which I have described to carry out their honourable obligations.
I do not think it is necessary to go into the details of the Bill, except to say this, that Clause 1, which is really the operative part of the Measure, relates to cuts first made between 30th September, 1931, and 1st April, 1932, on the understanding that superannuation rights were not thereby affected, and provides that any remuneration reduced on such understanding and received within a period of five years from 1st October, 1931, shall be treated as not reduced from the point of view of superannuation rights or contributions. Other provisions define the category of local employes covered by the Bill and make the operation of the Act retrospective as from 1st October, 1931. With this explanation, and admitting the contention of my hon. and gallant Friend the Member for Gainsborough that there are many anomalies in the law, and that we may at some time have to consider the whole problem of pensions, I hope the House will give a Second Reading to this Bill.

8.19 p.m.

Mr. GREENWOOD: I find myself in what is to me a strange position, that of supporting the Government. I believe I am right in saying to my hon. Friend that this is the first time I have been behind them in any Measure he has introduced. Admittedly the whole situation is anomalous, and the case which the hon. and gallant Member has made against the Bill is true in that we have not, as a matter of fact, adopted a national policy on what is to happen to people who enjoy certain statutory pension rights based upon their salaries now that their salaries have been reduced as a result of the economy fever of the National Government, but I feel that the hon. Members who are temporarily, very temporarily, opposing the Second Reading are trying to have it both ways. It is admitted that the pensions of certain of the higher classes of civil servants are based retrospectively on the salaries they enjoyed prior to the cuts.

Captain, CROOKSHANK: When the right hon. Gentleman says it is admitted, it is admitted as a fact, but it does not follow that it is admitted as being the right thing.

Mr. GREENWOOD: I am on the point that the hon. and gallant Member and his friends cannot have it both ways. They cannot say first that we should not create a precedent and then point out that precedents have been created, and it is the fact that certain grades of civil servants are obtaining pensions based upon their pre-cut salaries. Teachers, as I understand it, fall rather into an intermediate position, because their pensions are based on their previous five years' salaries, and therefore those who resigned in 1931 would suffer no cut and those who resigned in 1932 would suffer only a very, very small cut. There are also categories of public officers who are not affected, but it seems to me that the fact that other people are not being affected is no reason why, if we can put matters right as regards one group of public officers, we should refuse to do so.
Local authorities acted in perfect good faith, I am quite satisfied, when, at the instigation of the Government—I am not approving of the policy—and as part of the deal on salaries, they agreed that pensions should not be touched. It has to be remembered that the period
through which we are now passing is an exceptionally difficult one. Those who are going to be affected are the older Local Government officers, who ever since the pension schemes were introduced have been paying regularly year after year on the assumption that their pensions would be based upon the salaries which they were enjoying during that period of years. If arrangements had been made to deal with the pensions of those who are going to retire 10, 15, or 20 years from now there might be a case to be made, but having regard to the fact that the people affected are those who paid their dues under the old scale it seems to me that there is no moral case whatever against the Bill. I would have liked to see a wider Measure, and I agree with what was said by the hon. and gallant Member that we are in rather a muddled position about the whole thing, and the passage of this Bill may create other problems. But taking the Bill as it stands it seems to me that Parliament has no alternative—and I say this as no friend of the Government— but to support the honourable undertakings given by local authorities in pursuance of the Government's own policy. I hope that the hon. Gentlemen who have so boldly come forward to make their protest will let it stand where it is and will give the Bill a Second reading.

8.24 p.m.

Sir HENRY JACKSON: I want to assure the House, speaking on behalf of the National Association of Local Government officers, that they welcome the introduction of this Bill as evidence of the interest which the Government, and the Ministry of Health in particular, are taking in the officers of the local government service. I think it is worthy of note that this is the first occasion upon which the Government of the day have introduced a superannuation Bill dealing with local government officers. It is evidence of the Government's desire that the prejudicial effect upon a large number of local government officers in respect of superannuation, as a consequence of their endeavour to make a contribution in a time of national emergency, should now to a certain extent be removed.
Hon. Members have been reminded that I introduced a Bill last year of much wider scope than this. I should like to
take this opportunity of expressing my gratitude to the officials of the Ministry of Health, and to the Minister himself, for the very kind and sympathetic consideration which he gave to that Bill last year. The House has also been reminded that it was not found practicable to get complete agreement upon that Bill, and that progress could not be made with it. While the Bill which is introduced tonight is not so wide in scope as the Bill which I introduced last year, the National Association of Local Government Officers and myself welcome, and very sincerely appreciate, the provisions which are contained in it. It is a very considerable step in the right direction. From the speeches which have been made, there is little doubt that the Measure will find its place upon the Statute Book before this Session is over.
There are one or two minor questions which I would commend to the Minister for consideration on the Committee stage. They do not touch the principle of the Bill, and I feel confident that he will be able to deal with them. The first is that the Bill as it stands is confined to the reductions in the remuneration which have taken place between 30th September, 1931, and 1st April, 1932. I am advised— and I think that there is no doubt about it—that in consequence of the issue by the Ministry of Circular 1222 on 11th September, some reduction had taken place before 30th September, 1931. I suggest to the Minister that perhaps he could ante-date that 10th September to a little earlier date, so as to include those reductions. On the other side, after the issue of the more recent Circular 1311 of 22nd March, this year, again, for the first time, I understand, certain local authorities made cuts in the salaries of their officers. I hope that the Minister will extend the date 1st April, 1932, so as to include those officers. These are very small matters of detail.
The Bill refers to reductions in remuneration. I am advised that there is still some doubt whether this expression will include cases in which the salary has not been reduced, but still remains at its original figure, and deductions have been made from the amount which would otherwise have been payable from time to time to the officer. That is a detail which I feel sure the Minister will put right in the Committee stage. I end where I be-
gan by saying that this great association, representing over 70,000 local government officers, for which great body of public servants it can speak, welcomes this Bill, and thanks the Government for what they have done.

Mr. M. BEAUMONT: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the Whole House for To-morrow.—[Captain Margesson.]

The remaining Government Orders were read, and postponed.

ADJOURNMENT.

Resolved, "That this House do now adjourn."—[Captain Margesson.]

Adjourned accordingly at half-past Eight o'Clock.